Requirement 1. Compute the Fermenting Department\'s equivalent units of producti

Question

Requirement 1. Compute the Fermenting Department's equivalent units of production for direct materials and for conversion costs. Complete the partial production cost report below for the Fermenting Department, showing the equivalent units of production for direct materials and for conversion costs. Requirement 2. Compute the total costs of the units (gallons) (a) completed and transferred out to the Packaging Department, and (b) in the Fermenting Department ending Work-in-Process Inventory. Complete the Production Cost Report that you began in Requirement 1 by calculating the costs per equivalent unit in this step, and then by calculating the the total cost of units completed and transferred out and of units in ending inventory in the following step. (Round the cost per equivalent unit amounts to the nearest cent and all other amounts to the nearest dollar. Abbreviation used: EUP = equivalent units of production.)

Gallons Beginning Work-in-Process Inventory 500 gallons Started in production 8,600 gallons Completed and transferred out to Packaging in March 7,900 gallons Ending Work-in-Process Inventory (80% of the way 1,200 gallons through the fermenting process) Costs Beginning Work-in-Process Inventory: Direct materials $540 Direct labor 195 Manufacturing overhead allocated 210 Costs added during March: Direct materials 9,288 Direct labor 3,305 Manufacturing overhead allocated 3,378 Total costs added during March $15,971

Explanation / Answer

Weighted average cost Beggining units 500 Transferred out 7,900 Started intro production 8600 Ending units 1,200 Units accounted for 9100 9100 Equivalent units Material Conversion cost Units transferred                      A 7900 7900 Ending Units 1,200 1,200 Completion 100% 80% B 1200 960 Total units 9100 8860 Cost per equivalent units Particulars Material Conversion cost total As at beginning 540 405 945 Added during the month 9288 6683 15971 Cost to be accounted for 9828 7088 16916 Total eqivalent units 9100 8860 Cost per equivalent unit 1.08 0.80 1.88 Cost per equivalent unit = Cost to be accounted for / Total equivalent units Cost of ending work in progress Conversion cost Particulars Material Total Ending units 1,200 1,200 Cost per equivalent units 1.08 0.80 Completion 100% 80% Total cost 1296 768 2064 Cost of goods transferred Conversion cost Particulars Material Total Number of units 7900 7900 Cost per equivalent units 1.08 0.80 1.88 Total amount 8532 6320 14852

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