Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand

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 460-gallon batch.

Hank estimates that 3% of the grape concentrate is wasted, 12% 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.)

3,200 ounces of grape concentrate at $0.07 per ounce 828 pounds of granulated sugar at $0.40 per pound 874 lemons at $0.81 each 2,300 yeast tablets at $0.20 each 920 nutrient tablets at $0.10 each 3,000 ounces of water at $0.007 per ounce

Explanation / Answer

Calculation of the standard cost for one gallon of wine Total Total Per unit Grape 3200 3299 0.07 230.93 Sugar 828 940 0.4 376 Lemon 874 1250 0.81 1012.5 Tablet 2300 0.2 460 Nutrient 920 0.1 92 Water 3000 0.007 21 Total 2192.43 Per Unit 2192.43/460 4.766152 Standard Cost is $ 4.76 per gallon

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