Exercise 23-2 Your answer is incorrect. Try again. Hank Itzek manufactures and s
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Exercise 23-2 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 70-gallon batch 4,000 ounces of grape concentrate at $0.06 per ounce 105 pounds of granulated sugar at $0.36 per pound 112 lemons at $0.88 each 280 yeast tablets at $0.23 each 70 nutrient tablets at $0.12 each 3,400 ounces of water at $0.001 per ounce Hank estimates that 4% of the grape concentrate is wasted, 13% of the sugar is lost, and 26% 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 decimal places, e.g. 1.25.) Standard Cost Per Gallon Click if you would like to Show Work for this question: Open Show WorkExplanation / Answer
To calaculate the standard cost per gallon we need to take waste factor for various ingredients used for production.
1. For 4000 ounce of Grape concentrate use we have to purchase (extra 4%)4166.67 ounce @ .06= $250
2. For105 pound sugar purchase would be 120.6897@.36 =$43.45
3. for 112 lemons purchase would 151 lemons @ .88=$132.88
4. 280 yeast table @ .23= $64.40
5. 70 nutrient table @.12 =$8.40
6.3400 ounce water @ .001=$3.40
Total =$502.53 for 70 gallon and standard cost per gallon would be $502.53/70=$7.18
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