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 40-gallon batch.
- 2,700 ounces of grape concentrate at $0.08 per ounce
- 70 pounds of granulated sugar at $0.56 per pound
- 69 lemons at $0.86 each
- 120 yeast tablets at $0.21 each
- 120 nutrient tablets at $0.12 each
- 3,600 ounces of water at $0.009 per ounce
Hank estimates that 3% of the grape concentrate is wasted, 10% of the sugar is lost, and 28% of the lemons cannot be used.
Compute the standard cost of the ingredients for one gallon of wine.
Standard Cost Per Gallon$