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 Materials Conversion 100% 66% Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 20,300 199,000 153,000 66,300 100% 25% Work in process, beginning Cost added during June Materials Conversion $26,100 $25,600 $384,070 $231, 142 Requirement 1: Determine the equivalent units for June for the Blending Department. Materials Conversion Equivalent units of production Requirement 2: Compute the costs per equivalent unit for June for the Blending Department. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Materials Conversion Cost per equivalent unit $ Requirement 3: (a) Determine the total cost of ending work in process inventory. (Round your answers to the nearest dollar amount. Omit the "S" sign in your response.) Materials Conversion Total conversion Cost of ending work in process inventory SL (b) 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 $ Q " 2 1

Answer 1

1. Equivalent units of Production = Beginning Inventory x (100% - Completion) + Units started and completed + Ending Inventory x Completion

Units started and completed = 153000 - 20300 = 132700

Equivalent units of Production
Materials = 20300 x (100% - 100%) + 132700 + 66300 x 100% = 199000 units
Conversion = 20300 x (100% - 66%) + 132700 + 66300 x 25% = 156177 units

2. Cost per Equivalent unit = Cost added / Equivalent units
Material = $384070 / 199000 = $1.93 per unit
Conversion = $231142 / 156177 = $1.48 per unit

3.
a. Cost of Ending Work in Process
Material = 66300 x 100% x $1.93 = $127959
Conversion = 66300 x 25% x $1.48 = $24531
Total Cost = $152490

b. Total Cost of units transferred = 153000 x ($1.93+1.48) = $521730