Cool Sips, Inc. manufactures and sells a nutrition drink for children. The company 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-Drink at $.15 per ounce
- 40 pounds of granulated sugar $.60 per pound
- 63 kiwi fruit at $.80 each
- 100 protein tablets at $.90 each
- 4,000 ounces of water at $.0025 per ounce
Cool Sips estimates that 2% of the lime Kool-Drink is wasted, 20% of the sugar is lost, and 10% of the kiwis cannot be used.