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The Pattia Winery is one of the finest wineries in the country. One of its famous products is a red wine called Old Vines. Recently,
The Pattia Winery is one of the finest wineries in the country. One of its famous products is a red wine called Old Vines. Recently, management has become concerned about the increasing cost of making Old Vines and needs to determine if the current selling price of $10 per bottle is adequate. The winery wants to achieve a 25 percent gross profit on the sale of each bottle. The following information is given to you for analysis: Compute the prime costs per unit and the conversion costs per unit. Round your answer to two decimal places. If an amount box does not require an entry, leave it blank. Prime Costs Conversion Costs Direct materials $ $ Direct labor $ $ Overhead $ $ Totals $ $ Batch size 10,550 Cost Direct Material Olen grapes 22,155 Chancellor grape 9,495 Bottles 5,275 Total direct materials costs $36,925 Direct Labor Pickers 2,110 Crusher 422 Processor 8,440 Bottler 13,293 Total direct labor costs $24,265 Overhead Deprec. Equip 2,743 Deprec. build 5,275 Utilities 1,055 Indirect labor 6,330 Supervison 7,385 Supplies 9,917 Repairs 1,477 Misc 633 Total overhead cost $34,815 Total Production cost $96,005
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