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 Materials Conversion 700 400 Work in process, beginning Started into production Completed and transferred out Work in process, ending Unite 102.000 486,000 476.000 112.000 750 258 Work in process, beginning Cost added during June Materials Conversion $ 42,500 $ 15,600 $ 455,900 $ 332,160 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

Solution

	Material	Conversion
Equivalent Units of Production	560,000	504,000

.

	Material	Conversion
Cost per equivalent Unit	$                    0.89	$                   0.69

.

	Material	Conversion	Total
Ending Inventory	$ 74,760	$ 19,320	$ 94,080

.

	Material	Conversion	Total
Units Completed and transferred	$ 423,640	$ 328,440	$ 752,080

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 58,100
Cost incurred during period	$ 788,060
Total cost to be accounted for	$ 846,160
Costs accounted for as follows:
Cost of Units Transferred Out	$ 752,080
Cost of Ending Wip	$ 94,080
Total cost accounted for	$ 846,160

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	476,000			100%	476,000	100%	476,000
Ending WIP	112,000			75%	84,000	25%	28,000
Total	588,000			Total	560,000	Total	504,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 42,500	$ 15,600	$ 58,100
Cost incurred during period		$ 455,900	$ 332,160	$ 788,060
Total Cost to be accounted for		$ 498,400	$ 347,760	$ 846,160
Total Equivalent Units		560,000	504,000
Cost per Equivalent Units		$                   0.89	$                     0.69	$                1.58

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.89	84,000	$          74,760.00	476,000	$        423,640.00
Conversion cost	$ 0.69	28,000	$          19,320.00	476,000	$        328,440.00
TOTAL	$ 846,160	TOTAL	$ 94,080	TOTAL	$ 752,080