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 50-gallon batch.

2,400 ounces of grape concentrate at $0.01 per ounce
54 pounds of granulated sugar at $0.50 per pound
60 lemons at $0.80 each
100 yeast tablets at $0.21 each
100 nutrient tablets at $0.14 each
3,700 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.

Answer 1

total $3.36

Step-by-step explanation:

required for producing 50 gallons of wine:

2,400 ounces of grape concentrate at $0.01 per ounce = $24 / 50 = $0.48 x 1.04 = $0.50

54 pounds of granulated sugar at $0.50 per pound = $27 / 50 = $0.54 x 1.1 = $0.59

60 lemons at $0.80 each = $48 / 50 = $0.96 x 1.25 = $1.20

100 yeast tablets at $0.21 each = $21 / 50 = $0.42

100 nutrient tablets at $0.14 each = $14 / 50 = $0.28

3,700 ounces of water at $0.005 per ounce = $18.50 / 50 = $0.37

Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.

total standard cost per gallon:

• grape concentrate = $0.50
• granulated sugar = $0.59
• lemons = $1.20
• yeast tablets = $0.42
• nutrient tablets = $0.28
• water = $0.37
• total $3.36