Managerial Accounting: Baker Winery manufactures a fine wine

Managerial Accounting
Baker Winery manufactures a fine wine in two departments, Fermenting and Bottling. In the Fermenting Department, grapes are aged in casks for a period of 30 days. In the Bottling Department, the wine is bottled and then sent to the finished goods warehouse. Labor and overhead are incurred uniformly through both processes. Materials are entered at the beginning of both processes. Cost and production data for the Fermenting Department for December 2017 are presented below:
Cost data
Beginning work in process inventory 37,000 ($30,000 of materials cost)
Materials 390,000
Conversion costs 153,000
Total costs 580,000
Production data
Beginning work in process (gallons) 10,000 (40%)
Gallons started into production 130,000
Ending work in process (gallons) 16,000 (25%)

Instructions:
(a) Compute the equivalent units of production.
(b) Determine the unit production costs.
(c) Determine the costs to be assigned to units transferred out and ending work in process.
Powered by