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.

2,970 ounces of grape concentrate at $0.04 per ounce

54 pounds of granulated sugar at $0.45 per pound

60 lemons at $0.70 each

100 yeast tablets at $0.26 each

250 nutrient tablets at $0.10 each

2,700 ounces of water at $0.005 per ounce

Hank estimates that 1% 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

$____________

Answer 1

A B D E G Total Standard Standard Cost per Effective Total cost Quantity quantity 0.04 production wastage cost 2,970 2 Grape concentrate 99% 118.8 1% 120 3 Sugar 10% 90% 54 0.45 24.3 27 4 LemonS 42.0 25% 75% 60 0.7 56 5 Yeast 100% 100 0.26 26.0 26 6 Nutrient tablets 25.0 100% 250 0.1 25 2,700 100% 7 Water 0.005 13.5 13.5 8 Total standard cost 267.5 9 10 Standard cost per Gallon $267.5/50 $5.35

c D E F G Cost per Standard Effective Total Standard Quantity Total cost wastage production quantity 1 cost +D2/F2 +D3/F3 - 100% - E4|+D4/F4 - 100%-E2 2970 0.04 +B2*C2 0.01 2 Grape concentrate - 100%-E3 3 Sugar 54 0.45 +B3*C3 0.1 4 Lemons +B4*C4 60 0.7 0.25 +B5*C5 +D5/F5 100 5 Yeast 0.26 +D6/F6 +D7 /F7 |=SUM(G2:G7) +B6*C6 6 Nutrient tablets 0.1 1 250 +B7*C7 2700 0.005 7 Water 8 Total standard cost