Exercise 23-2 Hank Itzek manufactures and sells homemade wine, and he wants to d

Question

Exercise 23-2 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 20-gallon batch. 2,300 ounces of grape concentrate at $0.03 per ounce 32 pounds of granulated sugar at $0.54 per pound 37 lemons at $0.71 each 40 yeast tablets at $0.21 each 80 nutrient tablets at $0.16 each 2,400 ounces of water at $0.008 per ounce Hank estimates that 1% of the grape concentrate is wasted, 10% 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 decimal places, e.g. 1.25.) Standard Cost Per Gallon $

Explanation / Answer

Calculation of Standard cost per gallon

With the quantity mentioned above, Hank Itzek cannot manufacture wine of 20 gallons because we didn't the normal loss.

Standard cost per 20 gallons a. Cost of 2.300 ounces of grape concentrate $69 b Cost of 32 pounds of granulated sugar $17.28 C. Cost of 37 lemons $26.27 d. Cost of Yeast tablets $8.4 e. Cost of 80 Nutrient tablets 12.8 f. Cost of 2,400 ounces of water $19.2 Total Standard cost for 20 gallons $152.95

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