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 68,000 341,500 331,500 78,000 75% 25% Work in process, beginning Cost added during June Materials Conversion $ 25,000 $ 8,700 $ 267,500 $ 184,350 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:- 1. Computation of Equivalent Units of Production Particulars Total Units Materials Conversion % Unit % Unit Units Completed and Transferred out 331,500 100% 331,500 100% 331,500 Ending Work in process Inventory 78,000 75% 58,500 25% 19,500 Total Equivalent Units 409,500 ----- 390,000 ---- 351,000 2. Computation of Cost per Equivalent Units Particulars Materials Conversion Beginning Work in Process Cost $25,000 $8,700 Cost Added during June $267,500 $184,350 Total Cost Incurred (A) $292,500 $193,050 Equivalent Units (B) (see 1 part) 390,000 351,000 Cost Per Equivalent Units (A / B) $0.75 $0.55 3. Computation of Cost of Ending Work in Process Inventory Particulars Material cost Conversion cost Total Cost Cost of Ending WIP Material cost = 58,500 units x $0.75 = $43,875 Conversion Cost = 19,500 units x $0.55 = $10,725 $43,875 $10,725 $54,600 4. Computation of Cost of Units Completed & Transferred out Particulars Material cost Conversion Cost Total Cost Cost of units Completed & Transferred out Material Cost = 331,500 x $0.75 = $248,625 Conversion Cost = 331,500 x $0.55 = $182,325 $248,625 $182,325 $430,950 5. Cost Reconciliation Report Particulars Amount($) Cost to be accounted for :- Beginning Work in Process cost $33,700 Cost Added during June $451,850 Total Cost to be accounted for $485,550 Cost accounted for as follows:- Cost of Units Completed & transferred out (see 4 part) $430,950 Cost of Ending Work in Process ( see 3 part) $54,600 Total Cost accounted for $485,550