Question

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes...

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.

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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
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