Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per...

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 590-gallon batch.

3,300 ounces of grape concentrate at $0.09 per ounce

649 pounds of granulated sugar at $0.47 per pound

1,121 lemons at $0.67 each

1,180 yeast tablets at $0.28 each

590 nutrient tablets at $0.14 each

2,100 ounces of water at $0.005 per ounce

Hank estimates that 5% of the grape concentrate is wasted, 18% 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.)

What is the

Standard Cost Per Gallon

Solutions

Expert Solution

Computation of standard cost of the ingredients for one gallon of wine

Standard Costs

Grape = (3,300 x $0.09) / 0.95 = $312.63

Sugar = (649 x$0.47) / 0.82 = $371.99

Lemon = (1121 x $0.67) / 0.70 = $1072.96

Yeast Tablets = (1180 x $0.28) = $330.40

Nutrient Tablets = (590 x $0.14) = $82.60

Water = (2100 x $0.005) = $10.5

Total Standard Cost = $312.63 + 371.99 + 1072.96 + 330.40 + 82.60 + 10.50 = $2181.08

Production = 590-gallon batch.

Standard cost of the ingredients for one gallon of wine

= $2181.08 / 590

= $ 3.6967 per gallon batch

= or $3.70 per gallon batch (Rounded)

Standard Cost Per Gallon = $3.70

ekkarill92 answered 1 year ago

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