Smith Winery in Pleasant Valley, New York, has two departments: Fermenting and Smith Winery completed the following production cost report for its Fermenting Packaging. Direct materials are added at the beginning of the fermenting process Department for the month of March: (grapes) and at the end of the packaging process (bottles). Data from the month of (Click the icon to view the production cost report) March for the Fermenting Department are as follows Conversion costs are added evenly throughout each process. The company uses the weighted-average method (click the icon to view the data from March.) Read the requirements 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 Begin with the summary journal entry to record the assignment of direct materials and direct labor and the allocation of manufacturing overhead to the Fermenting Department. (Prepare a single compound journal entry. Record debits first, then credits. Exclude explanations from any journal entries.) Data Table 1 Gallons Beginning Work-in-Process Inventory 700 gallons 7,800 gallons Started in production 7,800 gallons Completed and transferred out to Packaging in March Ending Work-in-Process Inventory (80% of the way 700 gallons through the fermenting process) Costs Beginning Work-in-Process Inventory Direct materials $ 399 Beginning Work-in-Process Inventory $ 399 Direct materials 170 Direct labor Manufacturing overhead allocated 230 Costs added during March Direct materials 8,611 Direct labor 292 5,160 Manufacturing overhead allocated $ 14,063 Total costs added during March Reference Smith Winery Production Cost Report - Fermenting Department (Partial) Month Ended March 31 Direct Conversion Total Costs Materials Costs COSTS Costs to account for: 400 $ Beginning work-in-process 399 $ 799 14,063 8,611 5,452 Costs added during the period 9,010 $ Total costs to account for 5,852 $ 14,862 PrintDone 14,063 8,611 5,452 Costs added during the period 14,862 Total costs to account for 9,010 $ 5,852 $ 8,500 8,360 Divided by: Total equivalent units of production 1.06 $ 0.70 Co st per equivalent unit Costs accounted for Completed and transferred out 8,268 $ 5,460 $ 13,728 742 392 1,134 Ending work-in-process 9,010 $ 5,852 $ 14,862 Total costs accounted for G Requirements 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 2. Post the journal entries to the Work-in-Process Inventory is the ending balance? Fermenting T-account. What 3. What is the average cost per gallon transferred out of the Fermenting Department into the Packaging Department? Why would Smith Winery's managers want to know this cost? Debit Credit Date Accounts Mar. 31 Work-in-Process Inventory-Fermenting Raw Materials Inventory Wages Payable hoose from any list or enter any number in the input fields and then click Check
