Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand
ID: 2584715 • Letter: H
Question
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 50-gallon batch.
Hank estimates that 6% of the grape concentrate is wasted, 12% of the sugar is lost, and 22% 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.)
: $__________
3,500 ounces of grape concentrate at $0.06 per ounce 54 pounds of granulated sugar at $0.43 per pound 55 lemons at $0.78 each 50 yeast tablets at $0.24 each 250 nutrient tablets at $0.16 each 1,500 ounces of water at $0.008 per ounceExplanation / Answer
Answer:
Standard Cost Per Gallon
: $ 7.30
Working notes for the above answer is as under
A
B
C=A*B
3,500
ounces of grape concentrate at
$0.060
per ounce
$210.00
54
pounds of granulated sugar at
$0.430
per pound
23.22
55
lemons at
$0.780
each
42.90
50
yeast tablets at
$0.240
each
12.00
250
nutrient tablets at
$0.160
each
40.00
1,500
ounces of water at
$0.008
per ounce
12.00
Total cost for 50 gallons:
$340.12
Waste values:
Grape concentrate wasted (210*6%)
6.00%
12.60
Sugar lost (23.22*12%)
12.00%
2.79
Lemons that cannot be used (42.90*22%)
22.00%
9.44
Cost of waste and loss materials
24.82
Total cost including waste and lost
364.94
Standard costs for 1 gallon:
$7.30
Standard Cost Per Gallon
: $ 7.30
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