Jim Hetzel manufactures and sells homemade wine, and he wants to develop a stand

Question

Jim Hetzel manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 60-gallon batch. 3,800 ounces of grape concentrate at $0.04 per ounce 86 pounds of granulated sugar at $0.50 per pound 91 lemons at $0.82 each 180 yeast tablets at $0.24 each 60 nutrient tablets at $0.13 each 3,500 ounces of water at $0.004 per ounce Jim estimates that 2% of the grape concentrate is wasted, 10% of the sugar is lost, and 27% 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.)

Explanation / Answer

Grape : 3800*0.04/(1-2%) = $155.10 Sugar: 86*$0.50/(1-10%) = $47.78 Lemon: 91*$0.82/(1-27%) = $102.22 Yeast : 180*$0.24 = $43.20 Nu Tab : 60*$0.13 = $7.80 Water: 3500*$0.004 = $14.00 ---------------------------------- Total Cost = $370.10 So Per Gallon cost = $370.10/60 = $6.17

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