Question

Hnak Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 60-gallon batch.

2,800 ounces of grape concentrate at $0.04 per ounce

110 pounds of granulated sugar at $0.48 per pound

115 lemons at $0.69 each

240 yeast tablets at $0.25 each

180 nutrient tablets at $0.14 each

2,700 ounces of water at $0.006 per ounce

Hank estimates that 5% of the grape concentrate is wasted, 14% of the sugar is lost, and 23% of the lemons cannot be used.

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

Answer 1

STANDARD COST SHEET
	Per Batch of 60 Gallons	Per Gallon
Grape concentrate = 2800*0.04/95% =	$    117.89	$        1.97
Granulated sugar = 110*0.48/86% =	$      61.40	$        1.02
Lemons = 115*0.69/77% =	$    103.05	$        1.72
Yeast tablets = 240*0.25 =	$      60.00	$        1.00
Nutrient tablets = 180*0.14 =	$      25.20	$        0.42
Water = 2700*0.006 =	$      16.20	$        0.27
Total standard cost	$    383.74	$        6.40