Compute equivalent units in second department (Learning Objectives 2, 4)

Refer to the Polar Springs Bottling Department Data Set.

Requirements 1. Draw a time line similar to the one in Exhibit 4-10.

2. Complete the first two steps of the process costing procedure for the Bottling Department: summarize the physical flow of units and then compute the equiva¬ lent units of direct materials and conversion costs. Your answer should look similar to Exhibit 4-12.

Polar Spring produces premium bottled water. The preceding Short Exercises considered Polar Spring’s first process—filtration. We now consider Polar Spring’s second process—bottling. In the Bottling Department, workers bottle the filtered water and pack the bottles into boxes. Conversion costs are incurred evenly throughout the bottling process, but packaging materials are not added until the end of the process.
February data from the Bottling Department follow:

Beginning work in process inventory (40% of the way through the process). 8,000 liters Transferred in from Filtration* 160,000 liters Completed and transferred out to Finished Goods Inventory in February....... 154,000 liters Ending work in process inventory (70% of the way through the bottling process).. 14,000 liters Costs in beginning work in process inventory Costs added during February Transferred in.... $1,760 Direct materials.................. 0 Transferred in* .............. Direct materials................. $136,000 30,800 Direct labor.......................... 600 Direct labor...................... 33,726 Manufacturing overhead.... 520 Manufacturing overhead.... 22,484 Total beginning work in Total costs added process inventory as of during February..... $223,010 February 1 $2,880