Question

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June.

		Percent Completed
	Units	Materials	Conversion
Work in process, beginning	46,000	70%	40%
Started into production	248,000
Completed and transferred out	238,000
Work in process, ending	56,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	15,100	$	4,400
Cost added during June	$	161,300	$	93,880

Required:

1. Calculate the Blending Department's equivalent units of production for materials and conversion in June.

2. Calculate the Blending Department's cost per equivalent unit for materials and conversion in June.

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.

4. Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.

5. Prepare a cost reconciliation report for the Blending Department for June.

Answer 1

1) Equivalent unit

	Physical unit	% Eup	EUP-material	% conversion	EUP-Conversion
Unit transferred out	238000	100%	238000	100%	238000
Ending work in process	56000	75%	42000	25%	14000
Equivalent unit	294000		280000		252000

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	15100	4400
Cost added	161300	93880
Total cost	176400	98280
Equivalent unit	280000	252000
Cost per equivalent unit	0.63	0.39

3) Cost of ending Work in process

	Material	Conversion	Total
Cost of ending WIP	26460	5460	31920

4) Cost of unit transferred out

	Material	Conversion	Total
Cost of unit transferred out	149940	92820	242760

5) Cost reconciliation

Cost to be accounted for
Beginning WIP	19500
Cost added	255180
Total cost to be accounted for	274680
Cost accounted as
Cost of unit transferred out	242760
Cost of ending WIP	31920
Total cost accounted as	274680