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 58,000 70% 40% Started into production 299,000 Completed and transferred out 289,000 Work in process, ending 68,000 75% 25% Materials Conversion Work in process, beginning $ 20,000 $ 6,200 Cost added during June $ 214,600 $ 131,500 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.

	Physical Units	Equivalent Units
		Materials		Conversion
Completed and transferred out	289000	100%	289000	100%	289000
Ending work in process	68000	75%	51000	25%	17000
Equivalent units of production			340000		306000

2.

	Materials	Conversion	Total
Cost of beginning work in process	20000	6200	26200
Costs added during June	214600	131500	346100
Total costs $	234600	137700	372300
÷ Equivalent units of production	340000	306000
Cost per equivalent unit $	0.69	0.45	1.14

3.

	Materials	Conversion	Total
Cost of ending work in process inventory:
Materials (51000 x $0.69)	35190		35190
Conversion (17000 x $0.45)		7650	7650
Cost of ending work in process inventory $	35190	7650	42840

4.

	Materials	Conversion	Total
Cost of units transferred out:
Materials (289000 x $0.69)	199410		199410
Conversion (289000 x $0.45)		130050	130050
Cost of units transferred out $	199410	130050	329460

5.

Cost Reconciliation Report
Costs to be accounted for:
Work in process, June 1	26200
Costs added during June	346100
Total costs to be accounted for $	372300
Costs accounted for:
Completed and transferred out	329460
Work in process, June 30	42840
Total costs accounted for	372300