Question

Concord 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.

2,700 ounces of grape concentrate at $0.04 per ounce

59 pounds of granulated sugar at $0.30 per pound

60 lemons at $0.60 each

50 yeast tablets at $0.23 each

50 nutrient tablets at $0.20 each

2,400 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. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)

Standard Cost Per Gallon

$

Answer 1

Ans:

S.No	Particulars	Total Cost	Effective Production	Standard Cost
1	2700 Ounces of Grape Concentrate at $0.04 per Ounce	108	96.00%	112.5
2	59 Pounds of Granulated Sugar at $0.30 per Pound	17.7	90.00%	19.67
3	60 Lemons at $0.60 each	36	75.00%	48
4	50 Yeast tablets at 0.23 Each	11.5	100.00%	11.5
5	50 Nutrient Tablets at $0.20 each	10	100.00%	10
6	2400 Ounces of Water at $0.005 Per Ounce	12	100.00%	12
7	Total Cost and Standard Cost(1+2+3+4+5+6)	195.2		213.67
8	Total No of Gallons in one Batch			50
9	Standard Cost Per Gallon (S.NO: 7/8)			4.27