Exercise 11-2 (Video)

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.

2,880 ounces of grape concentrate at $0.04 per ounce

54 pounds of granulated sugar at $0.45 per pound

60 lemons at $0.80 each

250 yeast tablets at $0.24 each

250 nutrient tablets at $0.14 each

2,500 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