Peter Catalano's Verde Vineyards, in the Niagara Peninsula, produces three varieties of wine: merlot, viognier, and pinot noir. His winemaster, Kyle Pohle, has identified the following activities as cost pools for accumulating overhead and assigning it to products.
1. Culling and replanting: Dead or overcrowded vines are culled, and new vines are planted or relocated. (Each variety has a separate vineyard.)
2. Tying: The posts and wires are reset, and vines are tied to the wires for the dormant season.
3. Trimming: At the end of the harvest, the vines are cut and trimmed back in preparation for the next season.
4. Spraying: The vines are sprayed with chemicals for protection against insects and fungi.
5. Harvesting: The grapes are hand-picked, placed in carts, and transported to the crushers.
6. Stemming and crushing: Cartfuls of bunches of grapes of each variety are separately loaded into machines, which remove stems and gently crush the grapes.
7. Pressing and filtering: The crushed grapes are transferred to presses, which mechanically remove the juices and filter out bulk and impurities.
8. Fermentation: The grape juice, by variety, is fermented in either stainless-steel tanks or oak barrels.
9. Aging: The wines are aged in either stainless-steel tanks or oak barrels for one to three years, depending on the variety.
10. Bottling and corking: Bottles are machine-filled and corked.
11. Labelling and boxing: Each bottle is labelled, as is each nine-bottle case, with the name of the vintner, vintage, and variety.
12. Storing: Packaged and boxed bottles are stored awaiting shipment.
13. Shipping: The wine is shipped to distributors and private retailers.
14. Heating and air-conditioning of plant and offices.
15. Maintenance of buildings and equipment: Printing, repairs, replacements, and general maintenance are performed in the off-season.
Instructions
For each of Verde's 15 activity cost pools, identify a probable cost driver that might be used to assign overhead costs to its three wine varieties.