Shea 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. The company uses the weighted-average method. Data from the month of March for the Fermenting Department are as follows:
Gallons
Beginning Work-in-Process Inventory .................................... 500 gallons
Started in production ...................................................... 8,600 gallons
Completed and transferred out to Packaging in March .............. 7,900 gallons
Ending Work-in-Process Inventory (80% of the way ............... 1,200 gallons
through the fermenting process)
Costs
Beginning Work-in-Process Inventory:
Direct materials .................................................................. $ 540
Direct labor ......................................................................... 195
Manufacturing overhead allocated .............................................. 210
Costs added during March:
Direct materials ................................................................ 9,288
Direct labor ...................................................................... 3,305
Manufacturing overhead allocated ........................................... 3,378
Total costs added during March ......................................... $ 15,971
Requirements
1. Compute the Fermenting Department's equivalent units of production for direct materials and for conversion costs.
2. 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.