Exercise 23-2

Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a50-gallon batch.

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

54pounds of granulated sugar at $0.30per pound

60lemons at $0.60each

50yeast tablets at $0.25each

50nutrient tablets at $0.20each

2,600ounces of water at $0.005per ounce

Hank estimates that4% of the grape concentrate is wasted,10% of the sugar is lost, and25% 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

$