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Sunspot Beverages, Ltd., of Fiji uses the weighted average method in its process costing system. It makes blended tropical fr

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Solution

Material Conversion
Equivalent Units of Production                  200,000                 170,000

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Material Conversion
Cost per equivalent Unit $                    1.80 $                   1.55

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Material Conversion Total
Ending Inventory $ 72,000 $ 15,500 $ 87,500

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Material Conversion Total
Units Completed and transferred $ 288,000 $ 248,000 $ 536,000

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Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost $ 50,000
Cost incurred during period $ 573,500
Total cost to be accounted for $ 623,500
Costs accounted for as follows:
Cost of Units Transferred Out $ 536,000
Cost of Ending Wip $ 87,500
Total cost accounted for $ 623,500

Working

Statement of Equivalent Units(Weighted average)
Material Conversion cost
Units Complete % Equivalent units Complete % Equivalent units
Transferred out                  160,000 100%                  160,000 100%                 160,000
Ending WIP                    40,000 100%                    40,000 25%                   10,000
Total                  200,000 Total                  200,000 Total                 170,000

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Cost per Equivalent Units (Weighted average)
COST Material Conversion cost TOTAL
Beginning WIP Inventory Cost $ 25,200 $ 24,800 $ 50,000
Cost incurred during period $ 334,800 $ 238,700 $ 573,500
Total Cost to be accounted for $ 360,000 $ 263,500 $ 623,500
Total Equivalent Units                 200,000                  170,000
Cost per Equivalent Units $                   1.80 $                     1.55 $                3.35

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Statement of cost (Weighted average)
Cost Equivalent Cost/unit Ending WIP Transferred
Units Cost Allocated Units Cost Allocated
Material $ 1.80                   40,000 $          72,000.00             160,000 $ 288,000
Conversion cost $ 1.55                   10,000 $          15,500.00             160,000 $ 248,000
TOTAL $ 623,500 TOTAL $ 87,500 TOTAL $ 536,000
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