Exercise 15-2 Ayayai manufactures and sells homemade wine, and he wants to devel

Question

Exercise 15-2 Ayayai 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 3,300 ounces of grape concentrate at $0.04 per ounce 59 pounds of granulated sugar at $0.30 per pound 75 lemons at $0.50 each 50 yeast tablets at $0.24 each 50 nutrient tablets at $0.20 each 2,800 ounces of water at $0.005 per ounce Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% 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

3300 ounces of grape concentrate at $0.04 per ounce = $132 Including wasted juice = 132 / 0.96 = $137.5 59 pounds of granulated sugar at $0.30 per pound = $17.70 Including lost sugar = 17.70 / 0.90 = $19.67 75 lemons at $0.50 each = $37.5 Including wasted lemons = 37.5 / 0.75 = $50 50 yeast tablets at $0.24 each = $12 50 nutrient tablets at $0.20 each = $10 2800 ounces of water at $0.005 per ounce = $14 Total cost per 50 gallon batch = $410.3 410.3/ 50 = $8.21 per gallon

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