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	78,000	70%	40%
Started into production	384,000
Completed and transferred out	374,000
Work in process, ending	88,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	30,400	$	10,800
Cost added during June	$	326,000	$	230,760

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

Requirement 1

	Material	Conversion
Equivalent Units of Production	440,000	396,000

Requirement 2

	Material	Conversion
Cost per equivalent Unit	$                    0.81	$                   0.61

Requirement 3 and 4

	Material	Conversion	Total
Ending Inventory	$ 53,460	$ 13,420	$ 66,880
Units Completed and transferred	$ 302,940	$ 228,140	$ 531,080

.

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 41,200
Cost incurred during period	$ 556,760
Total cost to be accounted for	$ 597,960
Costs accounted for as follows:
Cost of Units Transferred Out	$ 531,080
Cost of Ending Wip	$ 66,880
Total cost accounted for	$ 597,960

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	374,000			100%	374,000.0	100%	374,000
Closing WIP	88,000			75%	66,000.0	25%	22,000
Total	462,000			Total	440,000.0	Total	396,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 30,400	$ 10,800	$ 41,200
Cost incurred during period		$ 326,000	$ 230,760	$ 556,760
Total Cost to be accounted for		$ 356,400	$ 241,560	$ 597,960
Total Equivalent Units		440,000	396,000
Cost per Equivalent Units		$                   0.81	$                     0.61

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.81	66,000	$          53,460.00	374,000	$ 302,940
Conversion cost	$ 0.61	22,000	$          13,420.00	374,000	$        228,140.00
TOTAL	$ 597,960	TOTAL	$ 66,880	TOTAL	$ 531,080