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% 40% Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 104,000 494,500 484,500 114,000 75% 25% Work in process, beginning Cost added during June Materials Conversion $ 44,300 $ 16,300 $ 474,400 $ 347,930

Answer 1

Solution

	Material	Conversion	Total
Ending Inventory	$ 77,805	$ 20,235	$ 98,040

.

	Material	Conversion	Total
Units Completed and transferred	$ 440,895	$ 343,995	$ 784,890

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	484,500			100%	484,500	100%	484,500
Ending WIP	114,000			75%	85,500	25%	28,500
Total	598,500			Total	570,000	Total	513,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 44,300	$ 16,300	$ 60,600
Cost incurred during period		$ 474,400	$ 347,930	$ 822,330
Total Cost to be accounted for		$ 518,700	$ 364,230	$ 882,930
Total Equivalent Units		570,000	513,000
Cost per Equivalent Units		$                   0.91	$                     0.71	$                1.62

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.91	85,500	$          77,805.00	484,500	$        440,895.00
Conversion cost	$ 0.71	28,500	$          20,235.00	484,500	$        343,995.00
TOTAL	$ 882,930	TOTAL	$ 98,040	TOTAL	$ 784,890