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Cold Spring Company produces premium bottled water. In the second department, the Bottling Department, conversion costs are incurred evenly throughout the bottling process, but packaging

Cold 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 $3,600 and conversion costs of

$2,781. February data for the Bottling Department follow:

Cool Spring Company

Work in Process InventoryBottling

Month Ended February 28, 2011

Physical

Physical

Units

Dollars

Units

Dollars

Beginning inventory, January 31 (60% complete)

6,000

$6,381

Transferred out

161,000

$ ?

Production started:

Transferred in

168,000

100,800

Direct materials

35,420

Conversion costs:

Direct labor

30,720

Manufacturing overhead

19,230

Total to account for

174,000

192,551

Ending inventory, February 28 (70% complete)

13,000

$ ?

Requirements

1.

Draw a time line.

2.

Compute the Bottling Department equivalent units for the month of February. Use the FIFO 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 journal entry to record the cost of units completed and transferred out.

6.

Post all transactions to the Work in process

inventorylong dashBottling

Department T-account. What is the ending balance?

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