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Paulson Winery in Albany, New York, has two departments: Fermenting and Packaging. Direct materials are added at the beginning of the fermenting process (grapes)
Paulson Winery in Albany, 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. Data from the month of March for the Fermenting Department are as follows: (Click the icon to view the data from March) Read the requirements Requirement 1. Fill in the time line for the Fermenting Department Start Complete Complete Data table Gallons: Beginning work in process inventory Started production 2,100 gallons 5,860 gallons Completed and transferred out to Packaging in March 6,560 gallons Ending work in process inventory (80% of the way through the fermenting process) 1,400 gallons Costs: Beginning work in process inventory ($2,500 of direct materials and $3,715 of conversion cost) Costs added during March: Direct materials Direct labor 6,215 67 9,440 600 1,829 $ 11,869 Total costs added during March. Manufacturing overhead Requirements 1. Fill in the time line for the Fermenting Department. 2. Summarize the flow of physical units and compute the total equivalent units. 3. Summarize total costs to account for and compute the cost per equivalent unit for direct materials and conversion costs. 4. Assign total costs to units (gallons): a. Completed and transferred out to the Packaging Department b. In the Fermenting Department ending work in process inventory 5. What is the average cost per gallon transferred out of Fermenting into Packaging? Why would the company's managers want to know this cost?
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