Anderson 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). Data from the month of March for the Fermenting Department are as follows: (Click the icon to view the data from March.) Anderson Winery completed the following production cost report for its Fermenting Department for the month of March: (Click the icon to view the production cost report.) Conversion costs are added evenly throughout each process. The company uses the weighted-average method. Read the requirements. Data table Gallons Beginning Work-in-Process Inventory Started in production Completed and transferred out to Packaging in March Ending Work-in-Process Inventory (80% of the way through the fermenting process) Costs Beginning Work-in-Process Inventory: Direct materials Direct labor Manufacturing overhead allocated Costs added during March: Print Done $ 300 gallons 9,600 gallons 4,800 gallons 5,100 gallons 2,164 160 180 Reference COSTS Costs to account for: Anderson Winery Production Cost Report - Fermenting Department (Partial) Month Ended March 31 Conversion Costs Beginning work-in-process Costs added during the period Total costs to account for Divided by: Total equivalent units of production Cost per equivalent unit Print $ $ $ Direct Materials 2,164 $ 8,330 10,494 $ 9,900 1.06 $ Done 340 $ 4,100 4,440 $ 8,880 0.50 Total Costs 2,504 12,430 14,934 Data table Ending Work-in-Process Inventory (80% of the way through the fermenting process) Costs Beginning Work-in-Process Inventory: Direct materials Direct labor Manufacturing overhead allocated Costs added during March: Direct materials Direct labor Manufacturing overhead allocated Total costs added during March Print Done $ $ 5,100 gallons 2,164 160 180 8,330 1,000 3,100 12,430 Reference COSTS Costs to account for: Beginning work-in-process Costs added during the period Total costs to account for Divided by: Total equivalent units of production Cost per equivalent unit Costs accounted for: Completed and transferred out Ending work-in-process Total costs accounted for Print $ $ $ $ $ Materials 2,164 $ 8,330 10,494 $ 9,900 1.06 $ 5,088 $ 5,406 10,494 $ Done Costs 340 $ 4,100 4,440 $ 8,880 0.50 2,400 $ 2,040 4,440 $ Costs 2,504 12,430 14,934 7,488 7,446 14,934 - X Requirement 1. Prepare the journal entries to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Fermenting Department. Assume labor costs are accrued and not yet paid. Also prepare the journal entry to record the cost of the gallons completed and transferred out to the Packaging Department. (Record debits first, then credits. Exclude explanations from any journal entries.) Begin with the journal entry to record the assignment of direct materials to the Fermenting Department. Do not record the assignment of direct labor or the allocation of manufacturing overhead with this entry. We will prepare those entries separately in the following steps. Date Accounts Debit Credit Mar. 31 Prepare the journal entry to record the assignment of direct labor to the Fermenting Department. Assume labor costs are accrued and not yet paid. Date Accounts Debit Credit Mar. 31 Prepare the journal entry for the allocation of manufacturing overhead to the Fermenting Department. Accounts Debit Credit Date Mar. 31 Also prepare the journal entry to record the cost of the gallons completed and transferred out to the Packaging Department. Date Accounts Debit Credit Mar. 31 Requirement 2. Post the journal entries to the Work-in-Process Inventory-Fermenting T-account. What is the ending balance? Post the entries using the appropriate descriptions as posting references. Denote the ending balance as "Bal." Work-in-Process Inventory-Fermenting Beg. Bal. 2,504 Work-in-Process Inventory-Fermenting 2,504 Beg. Bal. Requirement 3. What is the average cost per gallon transferred out of the Fermenting Department into the Packaging Department? Why would Anderson Winery's managers want to know this cost? (Round your answ to the nearest cent.) The average cost per gallon transferred out of Fermenting is per gallon. Why would Anderson Winery's managers want to know this cost? O A. Managers use the cost per gallon for external financial reporting-specifically to calculate the ending inventory balances on the Balance Sheet. O B. Managers would compare the average cost per gallon against their budgeted costs to determine whether the costs of the blending process remain under control. If budgeted costs are higher than the actual average cost per gallon, then the managers have done a good job controlling costs. In contrast, if the budgeted costs are lower than the actual average cost per gallon, managers will investigate the reason for the higher-than-expected costs in an effort to regain control over costs. OC. Managers use the cost per gallon for external financial reporting-specifically to calculate the Cost of Goods Sold on the Income Statement. O D. All of the above are reasons why management would be interested in this cost per unit for gallons completed and transferred out to Finished Goods Inventory