Question

Ayayai 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. 2,910 ounces of grape concentrate at $0.08 per ounce 54 pounds of granulated sugar at $0.40 per pound 60 lemons at $0.70 each 250 yeast tablets at $0.29 each 200 nutrient tablets at $0.12 each 2,800 ounces of water at $0.005 per ounce Ayayai estimates that 3% 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 8.54 Click if you would like to Show Work for this question: Open Show Work

Answer 1

	Standard quantity	Standard rate per SQ	Total standard cost
Grape concentrate	3000	.08	240
Granulated sugar	60	.40	24
Lemons	80	.70	56
Tablets	250	.29	72.5
Nutrient tablets	200	.12	24
water	2800	.005	14
Total cost			430.5
Number of gallon			50
Standard cost per gallon			430.5/50 = $ 8.61 per gallon

#

If 3% of grape is wasted then remaining 97% is used in production .Total quantity to be put in to production= 2910/.97 = 3000 ounce

If 10% of sugar is lost then remaining 90 % is used in production .Total quantity to be put in production = 54/90%= 60

If 25% of lemon is not fit for use then remaining 75 % is used in production .Total quantity to be put in production = 60/75% = 80