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
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 2017 are presented below: Cost data Beginning work in process inventory $ 37,000 ($30,000 of materials cost) Materials 390,000 Conversion costs 116,000 Total costs $543,000 Production data Beginning work in process (gallons) 5,000 (40%) Gallons started into production 79,000 Ending work in process (gallons) 8,000 (75%)
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Instructions: (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.
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