Shea Winery in Pleasant? Valley, New? York, has two? departments: Fermenting and

Question

Shea Winery in Pleasant? Valley, New? York, 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. The company uses the?weighted-average method. Data from the month of March for the Fermenting Department are as? follows:

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.)

Shea Winery Production Cost Report - Fermenting Department (Partial) Month Ended March 31 Equivalent Units Physical Units Direct Conversion UNITS Materials Costs Units to account for 500 8,600 9,100 Beginning work-in-process Started in production Total units to account for Units accounted for 7,900 1,200 9,100 7,900 1,200 9,100 7,900 960 8,860 Completed and transferred out Ending work-in-process Total units accounted for

Explanation / Answer

Below is the cost report:

Below is the calculation of EUP:

Ref Particulars Direct material Conversion Total costs Work in process, beginning                        540                        405               945 Started in production                     9,288                     6,683         15,971 A Total costs to account for                     9,828                     7,088         16,916 B Divided by Total EUP                     9,100                     8,860 C=B/A Weighted average cost per equivalent unit                       1.08                       0.80 Costs accounted for as follows: completed and transferred out                     8,532                     6,320         14,852 [1.08*7900] [0.8*7900] WIP ending                     1,296                        768            2,064 [1.08*1200] [0.8*960] Total costs accounted for                     9,828                     7,088         16,916

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