Your answer is incorrect. Try again. Hank Itzek manufactures and sells homemade

Question

Your answer is incorrect. Try again. Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 460-gallon batch. 3,200 ounces of grape concentrate at $0.07 per ounce 828 pounds of granulated sugar at $0.40 per pound 874 lemons at $0.81 each 2,300 yeast tablets at $0.20 each 920 nutrient tablets at $0.10 each 3,000 ounces of water at $0.007 per ounce Hank estimates that 3% of the grape concentrate is wasted, 12% of the sugar is lost, and 30% of the lemons cannot be used. Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 Standard Cost Per Gallon 3.43

Explanation / Answer

Calculation of standard cost of the ingredients for one gallon of wine

= [ (3200*$0.07/0.97) + (828*$0.40/0.88) + (874*$0.81/0.70) + (2300*$0.20) + (920*$0.10 ) + (3000*$0.007) ] / 460 Gallon Batch

= (230.93 + 376.36 + 1011.34 + 460 + 92 + 21) / 460

= 2191.63 / 460

= $4.76

Standard Cost per Gallon = $4.76

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