Paulson Winery in Napa Valley, California has 2 departments: Fermenting and packaging. Direct materials are added at the beginning of the fermenting process and at the end of the packaging process. Conversion costs are added evenly throughout each process. Data from the month of MArch for the fermenting department is as follows:
Gallons:
Beginning work in process inventor-0
Started production- 7800 gallons
Completed and transferred out to packaging in march- 6400 gallons
Ending work in process inventory (80% of the way through fermenting process)- 1400 Gallons
Costs:
Beginning work in process inventory- $0
Costs added during march:
Direct materials- $9360
Direct labor- $3662
Manufacturing overhead- $4610
Total costs added in march- $17632
Requirements:
R1- draw a time line for the fermenting process
R2- use the time line to help you compute the equivalent units for direct materials and for conversion costs
R3- compute the total costs of the units:
A-completed and transferred out to the packaging department
B- in the fermenting department ending work in process inventory
8) Refer to the data and your answers from exercise 7
Requirements:
R1-present the journal entires to record the assignment of Direct materials and direct labor and the allocation of manufacturing overhead to the fermenting department. Also, give the journal entry to record the cost of the gallons completed and transferred out to the packaging department
R2-post the journal entries to the work in process inventory--- fermenting T-account. What is the ending balance?
R3- What is the average cost pergallon transferred out of fermenting in packaging? Why would Paulson's Winery's managers to know this cost?