Question

In: Accounting

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes...

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 46,000 70% 40%
Started into production 248,000
Completed and transferred out 238,000
Work in process, ending 56,000 75% 25%


Materials Conversion
Work in process, beginning $ 15,100 $ 4,400
Cost added during June $ 161,300 $ 93,880


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.

Solutions

Expert Solution

Solution

Material Conversion
Equivalent Units of Production                  280,000                 252,000

.

Material Conversion
Cost per equivalent Unit $                    0.63 $                   0.39

.

Material Conversion Total
Ending Inventory $ 26,460 $ 5,460 $ 31,920

.

Material Conversion Total
Units Completed and transferred $ 149,940 $ 92,820 $ 242,760

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost $ 19,500
Cost incurred during period $ 255,180
Total cost to be accounted for $ 274,680
Costs accounted for as follows:
Cost of Units Transferred Out $ 242,760
Cost of Ending Wip $ 31,920
Total cost accounted for $ 274,680

Working

Statement of Equivalent Units(Weighted average)
Material Conversion cost
Units Complete % Equivalent units Complete % Equivalent units
Transferred out                  238,000 100%                  238,000 100%                 238,000
Ending WIP                    56,000 75%                    42,000 25%                   14,000
Total                  294,000 Total                  280,000 Total                 252,000

.

Cost per Equivalent Units (Weighted average)
COST Material Conversion cost TOTAL
Beginning WIP Inventory Cost $ 15,100 $ 4,400 $ 19,500
Cost incurred during period $ 161,300 $ 93,880 $ 255,180
Total Cost to be accounted for $ 176,400 $ 98,280 $ 274,680
Total Equivalent Units                 280,000                  252,000
Cost per Equivalent Units $                   0.63 $                     0.39 $                1.02

.

Statement of cost (Weighted average)
Cost Equivalent Cost/unit Ending WIP Transferred
Units Cost Allocated Units Cost Allocated
Material $ 0.63                   42,000 $          26,460.00             238,000 $        149,940.00
Conversion cost $ 0.39                   14,000 $             5,460.00             238,000 $          92,820.00
TOTAL $ 274,680 TOTAL $ 31,920 TOTAL $ 242,760

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