Question
In: Accounting
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 agoRelated Solutions
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