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 70% 408 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 96,000 460,500 450,500 106,000 75% 258 Work in process, beginning Cost added during June Materials Conversion $ 38,900 $ 14,100 $ 416,900 $ 300, 720 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

Answer 1 and 2

	Material	Conversion Cost
Equivalent units	530,000	477,000
Cost per unit	$     0.86	$                  0.66

Calculations:

Statement of Equivalent Production
Input	Particulars	Output	Material		Conversion cost
			%	Units	%	Units
556,500	Put and processed	450,500	100%	450,500	100%	450,500
	Closing stock	106,000	75%	79,500	25%	26,500
556,500	Total	556,500		530,000		477,000
	Costs:
	Opening		$             38,900		$             14,100
	June		$           416,900		$           300,720
	Total		$           455,800		$           314,820
	Cost per unit		$                  0.86		$                  0.66

Answer 3

Value of Closing Stock
Material	$ 68,370.00
Conversion cost	$ 17,490.00
Total	$ 85,860.00

Answer 4

Value of Put and processed
Material	$ 387,430.00
Conversion cost	$ 297,330.00
Total	$ 684,760.00

Answer 5

Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory	$    53,000
Costs added to production during the period	$ 717,620
Total cost to be accounted for	$ 770,620
Costs accounted for as follows:
Cost of ending work in process inventory	$    85,860
Cost of units completed and transferred out	$ 684,760
Total cost accounted for	$ 770,620

In case of any doubt, please comment.