Chapter 11, Problem 11.2E

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.

3,000 ounces of grape concentrate at $0.06 per ounce

54 pounds of granulated sugar at $0.30 per pound

60 lemons at $0.60 each

50 yeast tablets at $0.25 each

50 nutrient tablets at $0.20 each

2,600 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.

Instructions

Compute the standard cost of the ingredients for one gallon of wine. (Carry computations to two decimal places.)