Question

Problem 4-15 Comprehensive Problem-Weighted-Average Method (L04-2, L04-3, LO4-4, LO4-5) 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 100% 75% Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 20,000 180,000 160,000 40,000 100% 25% Work in process, beginning Cost added during June Materials Conversion $ 25,200 $ 24,800 $ 334,800 $ 238,700 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

	Pulping	Conversion
Equivalent Units of Production	200,000	170,000

.

	Pulping	Conversion
Cost per equivalent Unit	$ 1.80	$ 1.55

.

	Pulping	Conversion	Total
Cost of Ending work in process Inventory	$ 72,000	$ 15,500	$ 87,500

.

	Pulping	Conversion	Total
Cost of Units Completed and transferred out	$ 288,000	$ 248,000	$ 536,000

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 50,000
Cost incurred during period	$ 573,500
Total cost to be accounted for	$ 623,500
Costs accounted for as follows:
Cost of Units Transferred Out	$ 536,000
Cost of Ending Wip	$ 87,500
Total cost accounted for	$ 623,500

Working

Reconciliation of Units
A	Beginning WIP	20,000
B	Introduced	180,000
C=A+B	TOTAL	200,000
D	Transferred out	160,000
E=C-D	Ending WIP	40,000

.

Statement of Equivalent Units(Weighted average)
				Pulping		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	160,000			100%	160,000	100%	160,000
Ending WIP	40,000			100%	40,000	25%	10,000
Total	200,000			Total	200,000	Total	170,000

..

Cost per Equivalent Units (Weighted average)
COST		Pulping	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 25,200	$ 24,800	$ 50,000
Cost incurred during period (B)		$ 334,800	$ 238,700	$ 573,500
Total Cost to be accounted for (C=A+B)		$ 360,000	$ 263,500	$ 623,500
Total Equivalent Units(D)		200,000	170,000
Cost per Equivalent Units (E=C/D)		$ 1.80	$ 1.55	$ 3.35

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Pulping	$ 1.80	40,000	$          72,000.00	160,000	$        288,000.00
Conversion	$ 1.55	10,000	$          15,500.00	160,000	$        248,000.00
TOTAL	$ 623,500	TOTAL	$ 87,500	TOTAL	$ 536,000