Question

Problem 5-15 Comprehensive Problem-Weighted-Average Method (LO5-2, LO5-3, LO5-4, LO5-5) 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 102,000 486,000 476,000 112,000 75% 25% Work in process, beginning Cost added during June Materials Conversion $ 42,500 $ 15,600 $ 455,900 $ 332,160 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.

Equivalent units:

Material:

= 476,000 + (112,000 X 75%)

= 560,000

Conversion:

= 476,000 + (112,000 X 25%)

= 504,000

2.

Cost per equivalent unit;

Material:

= ($42,500 + $455,900) / 560,000

= $0.89

Conversion:

= ($15,600 + $332,160) / 504,000

= $0.69

3.

Ending work in process inventory:

Material:

= 112,000 X 75% X $0.89

= $74,760

Conversion:

= 112,000 X 25% X $0.69

= $19,320

Total:

= $74,760 + $19,320

= $94,080

4.

Units transferred out:

Material:

= 476,000 X $0.89

= $423,640

Conversion:

= 476,000 X $0.69

= $328,440

Total:

= $423,640 + $328,440

= $752,080

5.

Cost to be accounted:
Cost of beginning work in process inventory	$58,100
Cost added	$788,060
Total cost accounted for	$846,160
Cost to be accounted:
Cost of units transferred out	$752,080
Cost of ending work in process inventory	$94,080
Total cost accounted for	$846,160