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	20,000	100%	75%
Started into production	180,000
Completed and transferred out	160,000
Work in process, ending	40,000	100%	25%
		Materials	Conversion
Work in process, beginning		$25,200	$24,800
Cost added during June		$334,800	$238,700

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

1.	Equivalent units of production:
		Materials	Conversion
	Transferred to next department........................
	Equivalent units in ending work in process inventory:
	Materials: 40,000 units x 100% complete.......
	Conversion: 40,000 units x 25% complete......
	Equivalent units of production...........................

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

2.	Cost per equivalent unit
		Materials	Conversion
	Cost of beginning work in process.................
	Cost added during the period.........................
	Total cost (a).................................................
	Equivalent units of production (b)..................
	Cost per equivalent unit (a) ÷ (b)..................

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June. Also calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.

	Assigning costs to units:
		Materials	Conversion	Total
	Ending work in process inventory:
	Equivalent units....................
	Cost per equivalent unit........
	Cost of ending work in process inventory.............................
	Units completed and transferred out:
	Units transferred to the next department.........................
	Cost per equivalent unit........
	Cost of units completed and transferred out....................

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

	Cost reconciliation:
	Costs to be accounted for:
	Cost of beginning work in process inventory
	Costs added to production during the period
	Total cost to be accounted for........................
	Costs accounted for as follows:
	Cost of ending work in process inventory.......
	Cost of units completed and transferred out..
	Total cost accounted for.................................

Answer 1

B C D Materials 160,000 Conversion 160,000 1 1) Equivalent units of production: 2 3 Transferred to next department 4 Equivalent units in ending work in process inventory: 5 Materials: 40,000 units x 100% complete 6 Conversion: 40,000 units x 25% complete 7 Equivalent units of production 8 9 2) Cost per equivalent unit 40,000 10,000 170,000 200,000 10 Materials Conversion $ 25,200 $ 24,800 $ 334,800 $ 238,700 $ 360,000 $ 263,500 200,000 170,000 $ 1.80 $ 1.55 Materials Conversion Total 11 Cost of beginning work in process 12 Cost added during the period 13 Total cost (a) 14 Equivalent units of production (b) 15 Cost per equivalent unit (a) = (b) 16 17 3) Assigning costs to units: 18 19 Ending work in progress inventory: 20 Equivalent units 21 Cost per equivalent unit 22 Cost of ending work in progress inventory 23 Units Completed and transferred out: 24 Units transferred to the next department 25 Cost per equivalent unit 26 Cost of units completed and transferred out $ $ 40,000 1.80 $ 72,000 $ 10,000 1.55 15,500 $ 87,500 $ $ 160,000 160,000 1.80 $ 1.55 288,000 $ 248,000 $ 536,000

28 4) Cost reconciliation: 29 30 Costs to be accounted for: 31 Cost of beginning work in process inventory 32 Costs added to production during the period 33 Total cost to be accounted for 34 Costs accounted for as follows: 35 Cost of ending work in process inventory 36 Cost of units completed and transferred out. 37 Total cost accounted for $ $ $ 50,000 573,500 623,500 $ $ $ 87,500 536,000 623,500

B C D Materials =160000*100% Conversion =160000*100% 1 1) Equivalent units of production: 2 3 Transferred to next department 4 Equivalent units in ending work in process inventory: 5 Materials: 40,000 units x 100% complete 6 Conversion: 40,000 units x 25% complete 7 Equivalent units of production 8 9 2) Cost per equivalent unit =40000*100% -40000*25% =+C3+C6 =+B3+B5 10 Materials 25200 334800 =+B11+B12 =+B7 =+B13/B14 Conversion 24800 238700 =+C11+C12 =+C7 =+C13/C14 Materials Conversion Total 11 Cost of beginning work in process 12 Cost added during the period 13 Total cost (a) 14 Equivalent units of production (b) 15 Cost per equivalent unit (a) = (b) 16 17 3) Assigning costs to units: 18 19 Ending work in progress inventory: 20 Equivalent units 21 Cost per equivalent unit 22 Cost of ending work in progress inventory 23 Units Completed and transferred out: 24 Units transferred to the next department 25 Cost per equivalent unit 26 Cost of units completed and transferred out =+B5 =+B15 =+B20*B21 =+C6 +C15 =+C20*C21 =+B22+C22 =+B3 =+B15 =+B24*B25 =+C3 +C15 =+C24*C25 =+B26+C26

27 =25200+24800 =334800+238700 28 4) Cost reconciliation: 29 30 Costs to be accounted for: 31 Cost of beginning work in process inventory 32 Costs added to production during the period 33 Total cost to be accounted for 34 Costs accounted for as follows: 35 Cost of ending work in process inventory 36 Cost of units completed and transferred out. 37 Total cost accounted for =+B31+B32 =+D22 =+D26 =+B35+B36