Question

ABC corp makes blended tropical fruit beverages 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 october.

resh fruts and then blended in the Blending Department. The blended juices are then bottled and shipping in the Bottling department. The following infor mation pertains to the operations of the B De partment for October. Percent Completed Materials Conversion 100% Units Work in process, beginning Started into prod uct ion Completed and transferred out Work in proce ss, ending 20,000 170,000 160,000 70% 50,000 45% Materials Conversion $24,800 $334,700 $227,500 100% Work in process, beginning Cost added during October $25,300 Required: Assume that the company uses the weighted-average method A. Determine the equivalent units for October for the Blending Department. B. Compute the costs per equivalent unit for the Blending De partment. C. Determine the total cost of ending work in process inventory and the total cost of units tra the Bottling Department. D. Prepare a Production Report for October for the Blending Department.

Answer 1

1. Determination of equivalent units for October

	Material	Conversion
Completed and transferred	160,000	160,000
Equivalent units in Ending inventory (50,000×100%) (50,000×45%)	50,000	22,500
Equivalent units of production	210,000	182,50

2. Computation of cost per equivalent units

	Material	Conversion	Total
Beginning WIP	25,300	24,800	50,100
Cost added during the period	334,700	227,500	562,200
Total cost for the period	360,000	252,300	612,300
Equivalent units of product	210,000	182,500
Cost per EU	1.71	1.38

3.

	Material	Conversion	Total
Ending WIP
EU of production	50,000	22,500
Cost per EU	1.71	1.38
Total cost of Ending WIP	85,500	31,050	116,550

4. Production report weighted average method

Quantity schedule

	Physical units	Material	Conversion
Units account for begining WIP	20,000
Started into production	170,00
Total units	190,000
Units allocated
Transferred out	160,000	160,000	160,000
Ending WIP	72,500	50,000	22,500
Total units	232,500	210,000	182,500

Cost per equivalent units

Units	Material	conversion	Total
WIP	25,300	24,800	50,100
Cost in October	334,700	227,500	562,200
Total cost	360,000	252,300	612,300
EU of production	210,000	182,500
Cost per EU	1.71	1.38	3.09
COST RECONCILIATION
Total cost accounted for			612,300
Cost of completed units(160,000×3.09)			494,400
Cost of Ending WIP Material (50,000×1.71) Conversion (22,500×1.38) Total	85,500	31,050	116,550
Total costs			612,300

Note : cost per EU taken for 2 decimal places

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