Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand
ID: 2486238 • 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 90-gallon batch.
2,500 ounces of water at $0.005 per ounce
Hank estimates that 2% of the grape concentrate is wasted, 14% of the sugar is lost, and 29% 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.)
3,600 ounces of grape concentrate at $0.04 per ounce 176 pounds of granulated sugar at $0.39 per pound 158 lemons at $0.83 each 90 yeast tablets at $0.24 each 450 nutrient tablets at $0.17 each2,500 ounces of water at $0.005 per ounce
Hank estimates that 2% of the grape concentrate is wasted, 14% of the sugar is lost, and 29% 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
Calculation of standard cost of the ingredients for one gallon of wine:
Cost of grape concentrate
(3600 ounces * $0.04 / 90) / (100%-2%)
$ 1.63
Cost of granulated sugar
(176 Pounds * $0.39 / 90)/ (100%-14%)
$ 0.89
Cost of Lemons
(158 Lemons * $0.83 / 90) / (100%-29%)
$ 2.05
Cost of yeast tablets
(90 Tablets * $0.24 / 90)
$ 0.24
Cost of nutrient tablets
(450 Tablets * $0.17 / 90)
$ 0.85
Cost of water
(2500 ounces * $0.005 / 90)
$ 0.14
Standard cost of the ingredients for one gallon of wine
$ 5.80
Calculation of standard cost of the ingredients for one gallon of wine:
Cost of grape concentrate
(3600 ounces * $0.04 / 90) / (100%-2%)
$ 1.63
Cost of granulated sugar
(176 Pounds * $0.39 / 90)/ (100%-14%)
$ 0.89
Cost of Lemons
(158 Lemons * $0.83 / 90) / (100%-29%)
$ 2.05
Cost of yeast tablets
(90 Tablets * $0.24 / 90)
$ 0.24
Cost of nutrient tablets
(450 Tablets * $0.17 / 90)
$ 0.85
Cost of water
(2500 ounces * $0.005 / 90)
$ 0.14
Standard cost of the ingredients for one gallon of wine
$ 5.80
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