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Danny Baden’s Verde Vineyards in Oakville

Price: $1.99


Danny Baden’s Verde Vineyards in Oakville, California, produces three varieties of
wine: Merlot, Viognier, and Pinot Noir. His winemaster, Russel Hansen, has identifi ed the
following activities as cost pools for accumulating overhead and assigning it to products.
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 fi ltering. The crushed grapes are transferred to presses which mechanically
remove the juices and fi lter 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-fi lled 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 offi ces.

15. Maintenance of buildings and equipment. Printing, repairs, replacements, and general
maintenance are performed in the off-season.

Instructions
For each of Verde’s 15 activity cost pools, identify a probable cost driver that might be used
to assign overhead costs to its three wine varieties.

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