Tony Rondeli manufactures and sells homemade wine, and he wants to develop a sta
ID: 2371871 • Letter: T
Question
Tony Rondeli 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 after waste, spoilage and lost items.
Tony estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 20% of the lemons cannot be used.
Instructions
Compute the standard cost of the ingredients for one gallon of wine
3,000 ounces of grape concentrate at $0.04 per ounce 54 pounds of granulated sugar at $0.35 per pound 60 lemons at $0.60 each 50 yeast tablets at $0.25 each 50 nutrient tablets at $0.20 each 2,500 ounces of water at $0.004 per ounceExplanation / Answer
Info given is after waste, spoilage and lost items.
So we need to calculate the Before awaste, spoilage and lost items Qty.
Grape COnc = (3000/(1-0.04))*0.04 = 125.00
Sugar (54/(1-0.10))*0.35 = 21.00
Lemon (60/(1-20%))*0.60 = 45.00
Yeast 50*0.25 = 12.50
Nut Tab 50*0.20 = 10.00
Water 2500*0.004 = 10.00
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Total cost for 50Gall = $223.50
So Cost per Gallon = $223.50/50 = $4.47