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 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 Conversion $ 25,200 $ 24,800 $ 334,800 $ 238,700 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. Complete this question by entering your answers in the tabs below.

Answer 1

1)

Equivalent Units of Production- Weighted Average Method
	Units	% Materials	EUP- Materials	% Conversion	EUP- Conversion
Units completed and transferred out	160000	100%	160000	100%	160000
Units in ending work in process	40000	100%	40000	25%	(40000*25%)= 10000
Total equivalent units of production	200000		200000		170000

2) Cost per equivalent unit= (Cost of Work in process, beginning+Cost added during June)/Equivalent units of production

Materials= $(25200+334800)/200000= $1.80

Conversion= $(24800+238700)/170000= $1.55

	Materials	Conversion
Cost per equivalent unit	$1.80	$1.55

3) Cost of ending work in process of Materials= Units in ending work in process of materials*Cost per equivalent unit

= 40000*$1.80= $72000

Cost of ending work in process of Conversion= Units in ending work in process of Conversion*Cost per equivalent unit

= 10000*$1.55= $15500

Total Cost of ending work in process= $72000+15500= $87500

	Materials	Conversion	Total
Cost of ending work in process	$72000	$15500	$87500

4) Cost of units completed and transferred out

Materials= Units completed and transferred out*Cost per equivalent unit of materials

= 160000*$1.80= $288000

Conversion= Units completed and transferred out*Cost per equivalent unit of conversion

= 160000*$1.55= $248000

Total cost of units completed and transferred out= $288000+248000= $536000

	Materials	Conversion	Total
Cost of units completed and transferred out	$288000	$248000	$536000

5)

Blending Department
Cost Reconciliation
Cost to be accounted for:
Cost of beginning work in process (25200+24800)	$50000
Cost added during the period (334800+238700)	573500
Total cost to be accounted for	$623500
Cost accounted for as follows:
Cost of units completed and transferred out	536000
Cost of ending work in process	87500
Total cost accounted for	$623500