Prepare production reports under the weighted average

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Reference no: EM132460042

Table 1: Data for the Crushing and Fermenting Department for August 2011

Physical units
(barrels)

Direct
materials

Conversion
costs

Work in process, August 1

200

568.400

358,120

Degree of completion of beginning work in process

 

100%

70%

Started during August 2017

1,503

 

 

Completed during August 2017

1200

 

 

Work in process. August 31

Degree of completion of ending work in process

500

.   .     .

100%

60%

Total costs added during August 2017

 

S513.000

3436000

nest M runttarb valses at ID tddellos

 

 

 

Table 2:Data for the Bottling Department for August 2017

Physical units
(barrels)

Transferred•in

Direct
materials

Conversion
costs

Work in process. August 1

...         . ....... ,            ..  .       ..   .  .

Degree of completion of beginning work in process Transferred-in during August 2017

Completed during August 2017

250

7
300

$100.000
100%

SO
0%

$7.105
70%

Work in process. August 31

1,150

 

 

 

Degree of completion of ending work in process

 

100%

0%

60%

total costs added during August 2017

 

7

$18,400

514,025

Nme /41nrettgy fa,Jes re n US egtars.

 

 

 

 

Problem 1. Prepare production reports under the weighted average as well as the FIFO method. What is the cost per bottler under each method? What is considered as normal and abnormal spoilage, respectively in the wine making process? How are the costs associated with normal and abnormal spoilage treated? Is it appropriate to ignore the cost of normal spoilage because all spoilage is normal?

Problem 2. Myka would like to maintain a 50% gross profit to cover AVS/s administrative expenses of US$125,000 and target a 15% net profit. What should the target cost per case be in order to achieve these goals? Does the current production report in AVS help achieve these targets? Does your final production report show costs per case that will lead to achieving these targets?

Problem 3. What are the possible reasons for managers to stat that all spoilage is normal? What additional information would you request from managers to confirm that there is no abnormal spoilage and that all spoilage is normal?

Attachment:- FIFO.rar

Reference no: EM132460042

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