E5-31A Complete five-step procedure in first department (Learning Objective 3) C
ID: 2337983 • Letter: E
Question
E5-31A Complete five-step procedure in first department (Learning Objective 3) Cambria Winery in Santa Maria, California, has two departments: Fermenting and Pack- aging. 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: 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 2,900 gallons 4,770 gallons 6,420 gallons 1,250 gallons fermenting process) Costs: $ 3,509 Beginning work in process inventory ($2,100 of direct materials and $1,409 of conversion cost Costs added during March: Direct material.. Direct labor. Manufacturing overhead... $ 10,172 1,000 1301 $12,473 Total costs added during MarchExplanation / Answer
Req. 1
Conversion costs added evenly throughout the process
Direct Transferred
materials out to
added Packaging
Start 80% 100%
Completion
6,420 gallons completed and transferred out
1,250 gallons started but not finished
(ending work in process inventory)
Req. 2
Cambria Winery
Fermenting Department
Flow of Physical Units and Computation of Equivalent Units
Flow of
Physical Units
Equivalent Units
Direct Materials
Conversion Costs
Units to account for:
Beginning work in process, March 1
2,900
Started in production during March
4,770
Total physical units to account for
7,670
Units accounted for:
Completed and transferred out
during March
6,420
6,420
6,420
Ending work in process, March 31
1,250
1,250a
1,000b
Total physical units accounted for
7,670
Total equivalent units
7,670
7,420
__________
aThe time line shows that all direct materials are added at the beginning of the process, so the ending work in process inventory is complete as to materials.
b1,250 units × 80% = 1,000
Footnoted explanations are not required.
Req. 3
Cambria Winery
Fermenting Department
Cost per Equivalent Unit
Direct Materials
Conversion Costs
Total
Beginning work in process, March 1
$ 2,100
$1,409
$ 3,509
Costs added during March
10,172
2,301c
12,473
Costs to account for
$12,272
$3,710
$15,982
Divide by total equivalent units (from Req. 2)
÷ 7,670
÷ 7,420
Cost per equivalent unit
$ 1.60
$ 0.50
__________
c $1,000 + $1,301 = $2,301
Req. 4
Cambria Winery
Fermenting Department
Assign Costs
Direct
Materials
Conversion Costs
Total
a) Completed and transferred out:
Equivalent units completed and transferred out
6,420
6,420
Multiply by: Cost per equivalent unit
x $ 1.60
x $ 0.50
Cost assigned to units completed and transferred out
$ 10,272
$ 3,210
$13,482
b) Ending work in process inventory:
Equivalent units in ending WIP
1,250
1,000
Multiply by: Cost per equivalent unit
x $ 1.60
x $ 0.50
Cost assigned to units in ending WIP
$2,000
$ 500
$2,500
Total costs to account for
$15,982
Req. 5
The average cost per gallon transferred out of Fermenting is:
$13,482
=
$2.10 per gallon
6,420 gallons
Managers will want to know this cost to compare it to their budgeted target costs. They may also use the cost information when setting selling prices.
Cambria Winery
Fermenting Department
Flow of Physical Units and Computation of Equivalent Units
Flow of
Physical Units
Equivalent Units
Direct Materials
Conversion Costs
Units to account for:
Beginning work in process, March 1
2,900
Started in production during March
4,770
Total physical units to account for
7,670
Units accounted for:
Completed and transferred out
during March
6,420
6,420
6,420
Ending work in process, March 31
1,250
1,250a
1,000b
Total physical units accounted for
7,670
Total equivalent units
7,670
7,420
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.