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
	Units	Materials	Conversion
Work in process, beginning	66,000	70%	40%
Started into production	333,000
Completed and transferred out	323,000
Work in process, ending	76,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	24,000	$	8,300
Cost added during June	$	257,200	$	176,380

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

1. Calculate the Blending Department's equivalent units of production for materials and conversion in June.

	Materials	Conversion
Units completed and transferred	323000	323000
Ending work in process:
Materials (76000*75%)	57000	-
Conversion (76000*25%)	-	19000
Equivalent units of production	380000	342000

2. Calculate the Blending Department's cost per equivalent unit for materials and conversion in June.

	Materials	Conversion
Cost of beginning work in process	$24000	$8300
Cost added during June	257200	176380
Total costs	$281200	$184680
/Equivalent units of production	380000	342000
Cost per equivalent unit	$0.74	$0.54

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.

	Materials	Conversion	Total
Cost of ending work in process	(57000*$0.74)= $42180	(19000*$0.54)= $10260	$52440

4. Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.

	Materials	Conversion	Total
Cost of units transferred out	(323000*$0.74)= $239020	(323000*$0.54)= $174420	$413440

5. Prepare a cost reconciliation report for the Blending Department for June.

Blending Department
Cost Reconciliation Report
Cost to be account for:
Cost of beginning work in process ($24000+8300)	$32300
Cost added during June ($257200+176380)	433580
Total cost to be account for	$465880
Cost accounted for:
Cost of units transferred out	$413440
Cost of ending work in process	52440
Total cost account for	$465880