Question

Portland Pale Ale, Inc., makes a variety of specialty beers at its main brewery in Oregon. Production of beer occurs in three main stages: mashing, boiling, and fermenting. Consider the fermenting department, where direct materials (bottles and other packaging) are added at the end of the process. Conversion costs are added evenly during the process. Portland Pale Ale provides the following information related to its top-selling Gypsum Ale for the fermenting department for the month of July:


The units in beginning work in process are 25% complete for conversion costs, while the units in ending inventory are 50% complete for conversion costs.
1. Using the weighted-average method, summarize the total fermenting department costs for July, and assign costs to units completed (and transferred out) and to units in ending work in process.
2. Assume that the FIFO method is used for the fermenting department. Under FIFO, the transferred-in costs for work-in-process beginning inventory in July are $ 115,680 (instead of $ 116,000 under the weighted-average method), and the transferred-in costs during July from the boiling department are $ 376,000 (instead of $ 384,000 under the weighted-average method). All other data are unchanged. Summarize the total fermenting department costs for July, and assign costs to units completed and transferred out and to units in ending work in process using the FIFOmethod.


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  • CreatedMay 14, 2014
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