KraftFoodsInc.manufactures and sells a nutrition drink for children called Kool- Aid. It wants to develop a standard cost per gallon. The following are required for production of a 100-gallon batch: 1,960 ounces of lime Kool-Aid at $.12 per ounce 40 pounds of granulated sugar at $.60 per pound 63 kiwi fruit at $.50 each 100 protein tablets at $.90 each 4,000 ounces of water at $.003 per ounce Pane estimates that 2% of the lime Kool-Aid is wasted, 20% of the sugar is lost, and 10% of the kiwis cannot be used.

INSTRUCTIONS Compute the standard cost of the ingredients for one gallon of the nutrition drink. What decision would you advise the company s CEO to make.