Question

Sunspot Beverages, Ltd., of Fiji 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. (The currency in Fiji is the Fijian dollar.) Assume that the company uses the FIFO method rather than the weighted-average method in its process costing system. Percent Completed Units Materials Conversion 100% Work in process, beginning Started into production Completed and transferred out Work in process, ending 22,000 74% 188,000 141,000 69,000 100% 18% Materials Conversion Work in process, beginning Cost added during June $27,100 $351,560 $200,224 $25,500 Requirement 1: Determine the equivalent units for June for the Blending Department. Materials Conversion Equivalent units of production Requirement 2: Compute the costs per equivalent unit for June for the Blending Department. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Materials Conversion Cost per equivalent unit Requirement 3: (aDetermine the total cost of ending work in process inventory. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Materials Conversion Total Cost of ending work in process inventory (Determine the total cost of units transferred to the next process for the Blending Department in June. (Omit the "$" sign in your response.) Cost of units transferred out

Answer 1

1)out of units completed and transferred out (141000 units) ,22000 units is from beginning work in process and remaining 141000-22000= 119000 units is from those started and competed during the period.

	Material	conversion
beginning work in process	0	5720       [22000(1-.74already completed)]
started and completed	119000	119000
Ending work in process inventory	69000	12420     [69000*18%]
Equivalent units of production	188000	137140

2)

	Material	conversion
cost incurred during June	351560	200224
Equivalent units of production	188000	137140
cost per equivalent unit	351560/188000 = 1.87	200224/137140 = 1.46

3)

a)

	Material	conversion	Total
cost of ending work in process inventory (equivalent units*cost per equivalent unit)	69000*1.87 = 129030	12420*1.46 = 18133	147163

b)

Total cost incurred till month of June (27100+25500+351560+200224)	604384
less:cost of ending work in process inventory	-147163
cost of units transferred out	457221