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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. 3,800 ounces of grape concentrate at $0.07 per ounce 54 pounds of granulated sugar at $0.45 per pound 60 lemons at $0.70 each 150 yeast tablets at $0.28 each 200 nutrient tablets at $0.17 each 1,900 ounces of water at $0.005 per ounce Hank estimates that 5% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.

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. 3,800 ounces of grape concentrate at $0.07 per ounce 54 pounds of granulated sugar at $0.45 per pound 60 lemons at $0.70 each 150 yeast tablets at $0.28 each 200 nutrient tablets at $0.17 each 1,900 ounces of water at $0.005 per ounce Hank estimates that 5% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 62P
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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.

3,800 ounces of grape concentrate at $0.07 per ounce
54 pounds of granulated sugar at $0.45 per pound
60 lemons at $0.70 each
150 yeast tablets at $0.28 each
200 nutrient tablets at $0.17 each
1,900 ounces of water at $0.005 per ounce


Hank estimates that 5% 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. 

Standard Cost Per Gallon   $
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