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	102,000	70%	40%
Started into production	486,000
Completed and transferred out	476,000
Work in process, ending	112,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	42,500	$	15,600
Cost added during June	$	455,900	$	332,160

Required:

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

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

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

d. 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) Materials 560,000 Conversion 504,000 Equivalent unit of production 2) 2) Materials Conversion $ 0.89 $ 0.69 Cost per equivalent unit 3) Cost of ending work in process inventory Materials Conversion Total $ 74,760 $ 19,320$ 94,080 4) Materials Conversion Total $ 423,640 $ 328,440 $ 752,080 Cost of units completed and transferred out 5) Cost reconciliation Costs to be accounted for: Cost of beginning Work in process inventory ($42,500 + $15,600) $ 58,100 Cost added to production during the period ($455,900 + $332,160) $ 788,060 Total Cost to be accounted for $ 846,160 Cost accounted for as follow: Cost of unit completed and transferred out Cost of ending work in process inventory Total Cost accounted for $ 752,080 $ 94,080 $ 846,160 Working Note:

25% A B с D E F 1 Equivalent Units Of Production (EUP)- Weighted Average Method 2 Units % Materials EUP-Materials % Conversion Eup Conversion 3 Units Completed and transferred Out 476,000 100% 476,000 100% 476,000 4 Ending work in process - units 112,000 75% 84,000 28,000 5 Equivalent units of production 588,000 560,000 504,000 6 7 Cost per EUP Materials Conversion 8 Cost of beginning work in process $ 42,500 $ 15,600 9 Cost incurred this period $ 455,900 $ 332,160 10 Total costs costs $ 498,400 costs $ 347,760 11 Equivalent units of production EUP 560000 EUP 504000 12 Cost per Equivalent Unit of Production $ 0.89 $ 0.69 13 Cost Assignment and Reconciliation 14 Costs transferred out EUP Cost per EUP Total cost 15 Direct materials 476,000 $ 0.89 $ 423,640 16 Conversion 476,000 $ 0.69 $ 328,440 17 Total transferred out $ 752,080 18 Costs of ending work in process EUP Cost per EUP Total cost 19 Direct materials 84,000 $ 0.89 $ 74,760 20 Conversion 28,000 $ 0.69 $ 19,320 21 Total ending work in process $ 94,080 22 Total costs accounted for $ 846,160 $

A B C D E F 1 Equivalent Units Of Production (EUP)- Weighted Average Method 2 Units % Materials EUP-Materials % Conversion Eup Conversion 3 Units Completed and transferred Out 476000 1 =+B3*C3 1 =+B3*E3 4 Ending work in process - units 112000 0.75 =+B4*C4 0.25 =+B4*E4 5 Equivalent units of production =+B3+B4 =+D3+D4 =+F3+F4 6 7 Cost per EUP Materials Conversion 8 Cost of beginning work in process |42500 15600 9 Cost incurred this period 455900 332160 10 Total costs costs =+D8+D9 costs =+F8+F9 11 Equivalent units of production EUP =+D5 EUP =+F5 12 Cost per Equivalent Unit of Production =+D10/D11 =+F10/F11 13 Cost Assignment and Reconciliation 14 Costs transferred out EUP Cost per EUP Total cost 15 Direct materials =+D3 =+D12 =+B15*C15 16 Conversion =+F3 =+F12 =+B16*C16 17 Total transferred out =+D15+D16 18 Costs of ending work in process EUP Cost per EUP Total cost 19 Direct materials =+D4 =+D12 =+B19*C19 20 Conversion =+F4 =+F12 =+B20*C20 21 Total ending work in process =+D19+D20 22 Total costs accounted for =+E17+E21