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 zes Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 104,000 494,500 484,500 114,000 Work in process, beginning Cost added during June Materials Conversion $ 44,300 $ 16,300 $ 474,400 $ 347,93e 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. < Prev 2 of 2 3 Next > Search

Answer 1

Solution Step 1. Computation of Equivalent units of production Sunspot Beverages Limited Production Cost Report Blending Department Month Ended June 30 Equivalent Units Physical Units Direct Conversion Materials Units Units to account for Beginning work-in process Started in production 104,000 494,500 Total units to account for 598,500 Units accounted for: Units completed and transferred out 484,500 484,500 484,500 Ending work-in process 114,000 85,500 28,500 Total units accounted for 598,500 570,000 513,000 Step 2: Assignment of cost Direct Total Costs Conversion Materials Costs to account for: Costs in beginning work-in process Current period costs/Cost added during June Total costs to be accounted for $16,300 $347,930 $364,230 $60,600 $44,300 $474,400 $518,700 $822,330 $882,930 Costs per equivalent unit: $0.91 Direct Materials $0.71 Conversion Costs accounted for: Costs assigned to units transferred out $440,895 $440,895 Direct Materials $343,995 $784,890 $343,995 Conversion Total costs of units transferred out Costs assigned to ending WIP inventory: Direct Materials $77,805 $77,805 $20,235 $20,235 Conversion Total ending WIP inventory Total costs accounted for $98,040 $882,930 $518,700 $364,230

Required 1: Equivalent units of Production Materials Conversion Equivalent units of production 570,000 513,000 Required 2: Cost per equivalent unit Materials Conversion Cost per equivalent unit $0.91 $0.71 Required 3: Cost of ending work in process inventory Materials Conversion Total Cost of ending work in process inventory $77,805 $20,235 $98,04 Required 4: Cost of units completed and transferred out Materials Conversion Total Cost of units completed and transferred out $440,895 $343,995 $784,890 Required 5: Cost reconciliation report Blending Department Cost Reconciliation Costs to be account for Beginning work in process Cost added during June month $60,600 $822,330 Total costs to be accounted for $882,930 Costs accounted for as follows: Cost accounted in units completed and transferred out Cost accounted in Ending work in process inventory $784,890 $98,040 Total costs accounted for $882,930

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A C E 1 Solution Step 1. Computation of Equivalent units of production Sunspot Beverages Limited Production Cost Report-Blending Department 5 6 7 Month Ended June 30 Equivalent Units Physical 8 Units Direct Conversion Materials 10 Units Units to account for: Beginning work-in process Started in production Total units to account for 11 12 104000 13 494500 C12+C13 14 15 Units accounted for: 16 -C17*100 % 17 -C17 100 % -C18 25 % SUM(E17:E18) Units completed and transferred out 484500 114000 SUM(C17:C18)-SUM(D17:D18) 18 Ending work-in process Total units accounted for C18*75 % 19 20

A C E Step 2:Assignment of cost 21 22 Direct Total Costs Conversion 23 Materials 24 Costs to account for: -SUM(D25:E25) 44300 25 Costs in beginning work-in process Current period costs/Cost added during June SUM(D26:E26) 474400 Total costs to be accounted for 16300 347930 26 -SUM(C25:C26) SUM(D25:D26) 27 -SUM(E25:E26] 28 29 Costs per equivalent unit 30 -D27/D19 Direct Materials 31 -E27/E19 Conversion 32 33 Costs accounted for Costs assigned to units transferred out: 34 -SUM(D35:E35)D17 D30 -SUM(D36: E36) -SUM(C35:C36) 35 Direct Materials 36 -E17 E31 Conversion 37 Total costs of units transferred out 38 Costs assigned to ending WIP inventory: -SUM(D39: E39)D18 D30 -SUM(D40:E40) -SUM(C39:C40) -C37+C41 39 Direct Materials 40 -E18 E31 Conversion 41 Total ending WIP inventory Total costs accounted for -SUMID35:D41) -SUME35:E41) 42 43 Required 1: Equivalent units of Production 44 45 46 Materials Conversion 47 Equivalent units of production -D19 -E19 48 Required 2: Cost per equivalent unit 49 50 51 Materials Conversion 52 Cost per equivalent unit -D30 -E31 53

A Required 3: Cost of ending work in process inventory В Е 54 55 56 Materials Conversion Total Cost of ending work in process inventory -C57+D57 57 C39 -C40 58 Required 4: Cost of units completed and transferi 59 60 61 Materials Total Conversion -C62+D62 62 Cost of units completed and transferred out -С36 %3С35 63 Required 5:Cost reconciliation report 64 65 66 Blending Department 67 Cost Reconciliation Costs to be account for Beginning work in process Cost added during June month 71 68 C25 69 70 -С26 -SUM(D69: D70) Total costs to be accounted for 72 Costs accounted for as follows: -E62 73 Cost accounted in units completed and transferred out 74 Cost accounted in Ending work in process inventory -E57 =SUMID73:D74) 75 Total costs accounted for 76