Peter Catalano\'s Verde Vineyards in Oakville, California produces three varieti

Question

Peter Catalano's Verde Vineyards in Oakville, California produces three varieties of wine: Merlot, Viognier, and Pinot Noir. His winemaster, Kyle Ward, has identified the following activities as cost pools for accumulating overhead and assigning it to products. For each of Verde's fifteen activity cost pools, identify a probable cost driver that might be used to assign overhead costs to its three wine varieties.

Possible answers:
Gallons of chemicals
Gallons of juice
Number of cartfuls or labor hours
Gallons of wine or months of aging
Number of bottles
Number of gallons processed
Labor hours
Number of cartfuls
Number of boxes
Number of shipments

Culling and replanting. Dead or overcrowded vines are culled, and new vines are planted or relocated. (Separate vineyards by variety.)
Tying. The posts and wires are reset, and vines are tied to the wires for the dormant season.
Trimming. At the end of the harvest the vines are cut and trimmed back in preparation for the next season.
Spraying. The vines are sprayed with chemicals for protection against insects and fungi.
Harvesting. The grapes are hand-picked, placed in carts, and transported to the crushers.
Stemming and crushing. Cartfuls of bunches of grapes of each variety are separately loaded into machines which remove stems and gently crush the grapes.
Pressing and filtering. The crushed grapes are transferred to presses which mechanically remove the juices and filter out bulk and impurities.
Fermentation. The grape juice, by variety, is fermented in either stainless-steel tanks or oak barrels.
Aging. The wines are aged in either stainless-steel tanks or oak barrels for one to three years depending on variety.
Bottling and corking. Bottles are machine-filled and corked.
Labeling and boxing. Each bottle is labeled, as is each nine-bottle case, with the name of the vintner, vintage, and variety.
Storing. Packaged and boxed bottles are stored awaiting shipment.
Shipping. The wine is shipped to distributors and private retailers.
Heating and air-conditioning of plant and offices.
Maintenance of buildings and equipment. Printing, repairs, replacements, and general maintenance are performed in the off-season.

Explanation / Answer

CCOUNTING Peter Catalano's Verde Vineyards in Oakville, California produces three varieties of wine: Merlot, Viognier, and Pinot Noir. His winemaster, Kyle Ward, has identified the following activities as cost pools for accumulating overhead and assigning it to products: Choices: Number of bottles Number of boxes Gallons of wine or months of aging Number of cartfuls Labor hours Number of shipments Gallons of juice Number of gallons processed Gallons of chemicals Number or cartruls or labor hours 1. Culling and replanting. Dead or overcrowded vines are culled, and new vines are planted or relocated. (Separate vineyards by variety.) 2. Tying. The posts and wires are reset, and vines are tied to the wires for the dormant season. 3. Trimming. At the end of the harvest the vines are cut and trimmed back in preparation for the next season. 4. Spraying. The vines are sprayed with chemicals for protection against insects and fungi. 5. Harvesting. The grapes are hand-picked, placed in carts, and transported to the crushers. 6. Stemming and crushing. Cartfuls of bunches of grapes of each variety are separately loaded into machines which remove stems and gently crush the grapes. 7. Pressing and filtering. The crushed grapes are transferred to presses which mechanically remove the juices and filter out bulk and impurities. 8. Fermentation. The grape juice, by variety, is fermented in either stainless-steel tanks or oak barrels. 9. Aging. The wines are aged in either stainless-steel tanks or oak barrels for one to three years depending on variety 10. Bottling and corking. Bottles are machine-filled and corked. 11. Labeling and boxing. Each bottle is labeled, as is each nine-bottle case, with the name of the vintner, vintage, and variety. 12. Storing. Packaged and boxed bottles are stored awaiting shipment. 13. Shipping. The wine is shipped to distributors and private retailers. 14. Heating and air-conditioning of plant and offices 15. Maintenance of buildings and equipment. Printing, repairs, replacements, and general maintenance are performed in the off-season. Instructions For each of Verde's fifteen activity cost pools, identify a probable cost driver that might be used to assign overhead costs to its three wine varieties. 1 1 Vine yard 2 Wires length 3 Labor hour 4 Weight of chemical 5 labor hour 6 Bunches 7 Machine hour 8 Per litre 9 Year 10 Per bottle 11 Per case 12 Per case 13 Per order 14 Kilowatts 15 Labor hour 2 Indirect labor . It is variable as it is same per unit @$5 per unit at both activity levels. Supervisory salaries It is fixed as it is same in total at both activity levels Maintenance It is mixed as it is neither same per unit nor in total at both activity levels. 3 Fixed cost 12000 Variable cost 38 CM per room 12 a 1 1000 room a 2 $50,000 b 1 Expected sales 75000 less break even point -50000 Margin of safety $25,000 b2 33.33%

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.