Refer to the data and your answers from Exercise E18-21.

Gallons

Beginning Work-in-Process Inventory………………………………            0 gallons

Started in production…………………………………………………           7,900 gallons

Completed and transferred out to Packaging in May…………  4,400 gallons

Ending Work-in-Process Inventory

(80% of the way through the blending 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 May………………………………………...          $ 15,307

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. 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—Fermenting T-account. What is the ending balance?

3. What is the average cost per gallon transferred out of the Fermenting Department into the Packaging Department? Why would Anderson Winery’s managers want to know this cost?