Clear Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process. Costs in beginning work in process inventory include transferred in costs of \(\$ 1,760\), direct labor of \(\$ 600\), and manufacturing overhead of \(\$ 520\). February data for the Bottling Department follow:

Requirements 

1. Draw a time line.

2. Compute the Bottling Department equivalent units for the month of February. Use the weighted-average method.

3. Compute the cost per equivalent unit for February.

4. Assign the costs to units completed and transferred out and to ending inventory.

5. Prepare the jouinal entry to record the cost of units completed and transferred out.

6. Post all transactions to the Work in Process Inventory-Bottling Department T-account. What is the ending balance?

Transcribed Image Text:

CLEAR SPRING COMPANY Work in Process Inventory-Bottling Month Ended February 28, 2009 Beginning inventory, January 31 (40% complete) Production started: Transferred in Direct materials Conversion costs: Direct labor Physical Units Physical Dollars Units Dollars 8,000 $ 2,880 Transferred out 154,000 160,000 136,000 30,800 33,726 Manufacturing overhead 22,484 Total to account for 168.000 $225,890 Ending inventory, February 28 (70% complete) 14,000