Question

Problem 6-17 Comprehensive Process Costing Problem [LO2, LO3, LO4, LO5]

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. Percent Completed Materials Conversion 100% 75% Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 20,000 180,000 160,000 40,000 100% 25% Work in process, beginning Cost added during June Materials $ 25,200 $ 334,800 Conversion $ 24,800 $ 238, 700 Required: Assume that the company uses the weighted average method. 1. Determine the equivalent units for June for the Blending Department. Materials Conversion Equivalent units of production 2. Compute the costs per equivalent unit for the Blending Department. (Round your answers to 2 decimal places.) Materials Conversion Cost per equivalent unit

Answer 1

1) compute equivalent unit of production

   Equivalent unit of production (weighted average method)

Particular	units	%material	EUP material	%conversion	EUP CONVERSION
Units completed and transferred out	160000	100	160000	100	160000
Units of end in process	40000	100%	40000	25%	10000
Equivalent units of production			200000		170000

2) compute cost for equivalent units of production

  

Cost per equivalent unit	materials ($)	conversion ($)
Cost of beginning work in process	25200	24800
Cost added during month	334800	238700
Total cost	360000	263500
Equivalent units of production	200000	170000
Cost per equivalent unit of production (Total cost/equivalent units of production)	360000/200000= 1.8	263500/170000= 1.55

3) total cost of ending wip inventory

Cost of ending work in process	EUP	cost per EUp	total cost
Material	40000	$1.8	72000
Conversion	10000	$1.55	15500
total ending cost of inventory			87500

Total cost of units transferred

Cost of units transferred	EUp	cost per unit	total cost
Material	160000	1.88	288000
Conversion	160000	1.55	248000
Total transferred out			536000

1. 4). COST OF Reconciliation report

   Particular	amount
   cost to be accountable
   Cost of beginning work in process(25200+24800)	50000
   Cost added during production(334800+238700)	573500
   Total cost to be accounted her	$623500
   Cost account for as follow
   Cost of units transferred out	536000
   Cost of ending wip	87500

Total cost accounted for = $623500

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