Problem:
Drawing a timeline, computing equivalent units, and assigning cost to completed units and ending work in process; no beginning work in process inventory or cost transferred in Samson Winery in Pleasant Valley, New York, has two departments: Fermenting and Packaging. Direct materials are added at the beginning of the fermenting process (grapes) and at the end of the packaging process (bottles). Conversion costs are added evenly throughout each process. Data from the month of March for the Fermenting Department are as follows:
|
Gallons:
|
|
|
Beginning work in process inventory
|
0
|
|
Started production
|
9,100 gallons
|
|
Completed and transferred out to Packaging in March
|
7,900 gallons
|
|
Ending work in process inventory (80% of the way through
|
|
|
fermenting process)
|
1,200 gallons
|
|
Costs:
|
|
|
Beginning work in process inventory
|
$ 0
|
|
Costs added during March:
|
|
|
Direct materials
|
9,828
|
|
Direct labor
|
3,500
|
|
Manufacturing overhead
|
3,588
|
|
Total costs added during March
|
$16,916
|
Requirements
1. Draw a timeline for the Fermenting Department.
2. Use the timeline to help you compute the equivalent units for direct materials and for conversion costs.
3. Compute the total costs of the units (gallons)
a. completed and transferred out to the Packaging Department.
b. in the Fermenting Department ending Work in process inventory.