Anderson Winery in Pleasant Valley, 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:
Gallons
Beginning Work-in-Process Inventory......................................0 gallons
Started in production.....................................................7,900 gallons
Completed and transferred out to Packaging in March..............4,400 gallons
Ending Work-in-Process Inventory (80% of the way
through the fermenting process)........................................3,500 gallons
Costs
Beginning Work-in-Process Inventory............................................$ 0
Costs added during March:
Direct materials....................................................................8,611
Direct labor........................................................................2,196
Manufacturing overhead allocated.............................................4,500
Total costs added during March.............................................$ 15,307
Requirements
1. Compute the Fermenting Department's equivalent units of production for direct materials and for conversion costs.
2. Compute the total costs of the units (gallons)
a. Completed and transferred out to the Packaging Department.
b. In the Fermenting Department ending Work-in-Process Inventory.