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	56,000	70%	40%
Started into production	290,500
Completed and transferred out	280,500
Work in process, ending	66,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	19,100	$	5,900
Cost added during June	$	205,300	$	124,780

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

(1) equivalent units of production
Equivlent Units of Poduction (EUP)-Weighted verge Method
	Units	Materials (%)	EUP -Materials	Conversion(%)	EUP-Conversion
Unit completed and Transferred out	280500	100	280500	100	280500
Units in ending Inventory	66000	75	49500	25	16500
Equivalent Units of Poduction	346500		330000		297000
(2) cost per equivalent unit
Cost per Equivlent unit of Production
			Mterils		Conversion	Total $
Cost of beginning of inventory			$                  19100		$                      5900	25000
cost incurred this period			$                 205300		$                    124780	330080
Totl cost                                      (A)			$                  224400		$                    130680	355080
Equivlents of production    (B)		EUP	330000		297000
Cost of equivalent unit of production (A/B)			$                        0.68		$                         0.44	1.12
(3) Cost of ending Work in process
Material	(49500*$0.68)	$                 33660
Conversion cost	(16500*$0.44)	$                     7260
Total cost of ending work in process		$                   40920
(4) Cost unit transferred out
Material	(280500*$0.68)	$                190740
Conversion cost	(280500*$0.44)	$                123420
cost of unit transferred out		$                314160
( 5) Cost Reconcilition Report
	$
Cost to be accounted
Beginning work in process	25000
cost added during the yer	330080
Cost to be accounted	355080
	$
Cost accounted for
Cost of ending work in process	40920
cost of unit trasferred out	314160
Cost accounted for	355080