Anderson Winery in Napa Valley, California, 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:

Requirements 

1. Draw a time line for the Fermenting Department.

2. Use the time line to help you compute the equivalent units for direct materials and for conversion costs.

3. 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.

Transcribed Image Text:

Gallons: Beginning work in process inventory Started production Completed and transferred out to Packaging in March Ending work in process inventory (80% of the way through the fermenting process) Costs: Beginning work in process inventory Costs added during March: Direct materials Direct labor Manufacturing overhead Total costs added during March 8,000 gallons 6,550 gallons 1,450 gallons $ 0 10,400 2,400 4,539 $17,339