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 94,000 452,000 442,000 104,000 75% 25% Work in process, beginning Cost added during June Materials Conversion $ 37,700 $ 13,700 $ 404,300 $ 290,500 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

Solution

	Material	Conversion
Equivalent Units of Production	520,000	468,000

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	Material	Conversion
Cost per equivalent Unit	$ 0.85	$ 0.65

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	Material	Conversion	Total
Cost of Ending work in process Inventory	$ 66,300	$ 16,900	$ 83,200

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	Material	Conversion	Total
Cost of Units Completed and transferred out	$ 375,700	$ 287,300	$ 663,000

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Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 51,400
Cost incurred during period	$ 694,800
Total cost to be accounted for	$ 746,200
Costs accounted for as follows:
Cost of Units Transferred Out	$ 663,000
Cost of Ending Wip	$ 83,200
Total cost accounted for	$ 746,200

Working

Statement of Equivalent Units(Weighted average)
			Material	Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	442,000			100%	442,000	100%	442,000
Ending WIP	104,000			75%	78,000	25%	26,000
Total	546,000			Total	520,000	Total	468,000

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Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 37,700	$ 13,700	$ 51,400
Cost incurred during period (B)		$ 404,300	$ 290,500	$ 694,800
Total Cost to be accounted for (C=A+B)		$ 442,000	$ 304,200	$ 746,200
Total Equivalent Units(D)		520,000	468,000
Cost per Equivalent Units (E=C/D)		$ 0.85	$ 0.65	$ 1.50

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