Baker Winery manufactures a fine wine in two departments, Fermenting and Bottlin
ID: 2422527 • Letter: B
Question
Baker Winery manufactures a fine wine in two departments, Fermenting and Bottling. In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine is bottled and then sent to the finished goods warehouse. Labor and overhead are incurred uniformly through both processes. Materials are entered at the beginning of both processes. Cost and production data for the Fermenting Department for December 2013 are presented below:
(25%)
A.) Compute the equivalent units of production.
B.) Determine the unit production costs.
C.) Determine the costs to be assigned to units transferred out and ending work in process.
PLEASE ANSWER ALL QUESTIONS
Cost data Beginning work in process inventory $37,000 ($30,000 of materials cost) Materials 390,000 Conversion costs 121,000 Total costs $548,000 Production data Beginning work in process (gallons) 5,000 (40%) Gallons started into production 65,000 Ending work in process (gallons) 8,000(25%)
Explanation / Answer
(a) Equivalent Units
Physical Units Materials Conversion Costs
Transferred out 62,000* 62,000 62,000
Ending work in process 8,000 8,000 2,000 (8,000 × 0.25)
Total 70,000 70,000 64,000
*(5,000 + 65,000) – 8,000
(b) Unit Production Costs:
Materials $6 ($420,000* ÷ 70,000)
Conversion costs 2 ($128,000** ÷ 64,000)
Total unit cost $8
*($30,000 + $390,000)
**[($37,000 – $30,000) + $121,000]
(c) Costs assigned to units transferred out and ending work in process:
Total Costs Assigned
Transferred out (62,000 × $8) $496,000
Ending work in process
Materials (8,000 × $6) $48,000
Conversion costs (2,000 × $2) 4,000 52,000
$548,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.