Question

Problem 5-15 Comprehensive Problem-Weighted Average Method [LO5-2, LO5-3, LO5-4, LO5-5) 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 Materials Conversion 700 400 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 72.000 358,500 168.500 82,000 759 Work in process, beginning Cost added during June Materials Conversion $ 26,900 $ 9.400 200.000 200.930 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). Calculation of Equivalent units = Units completed and transferred out + Ending WIP * % completed
Materials = 348,500 + 82,000 * 75% = 410,000
Conversion = 348,500 + 82,000 * 25% = 369,000

2). Cost per equivalent unit Cost of beginning work in process, Mar 1 Add: Cost added during March Total Cost (A) Equivalent Units of Production (B) Cost per equivalent Unit (A/B) $ $ $ Material 26,900.00 $ 2,88,800.00 $ 3,15,700.00 $ 4,10,000 0.77 $ Conversion 9,400.00 2,00,930.00 2,10,330.00 $ 0.57 3). Cost of ending WIP Material Conversion Total Ending Work in process inventory Equivalent Units (82000 units (75%: 25%)) Cost per equivalent unit Cost of ending work in process inventory $ $ 61500 0.77 $ 47,355.00 $ 20500 0.57 11,685.00 $ 59,040.00 4). Cost of units transferred out Units completed and transferred out Units tranferred to next department Cost per equivalent unit Cost of units completed and transferred 348500 0.77 $ 2,68,345.00 $ 348500 0.57 1,98,645.00 $ $ 4,66,990.00 5). Cost Reconciliation Cost to be accounted for: Cost of beginning work in process inventory ($26,900 + $9,400) Cost added to production during march ($288,800 + $200,930) Total cost to be accounted for $ 36,300.00 $ $ 4,89,730.00 5,26,030.00 Cost accounted for as follows: Cost of ending work in process inventory Cost of units completed and tranferred out Total cost accounted for $ $ $ 59,040.00 4,66,990.00 5,26,030.00