Question

Selzik Company makes super-premium cake mixes that go through two processing departments—Blending and Packaging. The following activity was recorded in the Blending Department during July:

Production data:
Units in process, July 1 (materials 100% complete; conversion 30% complete)		10,000
Units started into production		170,000
Units in process, July 31 (materials 100% complete; conversion 40% complete)		20,000
Cost data:
Work in process inventory, July 1:
Materials cost	$	8,500
Conversion cost	$	4,900
Cost added during the month:
Materials cost	$	139,400
Conversion cost	$	244,200

All materials are added at the beginning of work in the Blending Department. The company uses the FIFO method in its process costing system.

Required:

1. Calculate the Blending Department's equivalent units of production for materials and conversion for July.

2. Calculate the Blending Department's cost per equivalent unit for materials and conversion for July.

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for July.

4. Calculate the Blending Department's cost of units transferred out to the next department for materials, conversion, and in total for July.

5. Prepare a cost reconciliation report for the Blending Department for July.

• Required 1
• Required 2
• Required 3
• Required 4
• Required 5

Calculate the Blending Department's equivalent units of production for materials and conversion for July.

Required 1

	Materials Conversion Equivalent units of production

	Required 2
		Materials Conversion Cost per equivalent unit

Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for July. (Round your intermediate calculations to 2 decimal places.)

	Materials Conversion Total Cost of ending work in process inventory

required 4 Materials Conversion Total Cost of units transferred out

Prepare a cost reconciliation report for the Blending Department for July. (Round your intermediate calculations to 2 decimal places.)

	Blending Department Cost Reconciliation Costs to be accounted for: Total cost to be accounted for Costs accounted for as follows: Total cost accounted for

Answer 1

Blending Department
Equivalent units of production (EUP) - FIFO method
	Units	% material	EUP-Materials	% Conversion	EUP- Conversion
units in process, July 1	10000	0%	0	70%	7000
Units started and completed during July (170000- 20000)	150000	100%	150000	100%	150000
Toal units completed and transferred out			150000		157000
Units in process, July 31	20000	100%	20000	40%	8000
Equivalent units of production			170000		165000
Solution 2:
Cost per Equivalent unit:	Material	Conversion
Cost added during July	$1,39,400	$2,44,200
/Equivalent units of Production	170000	165000
Cost per Equivalent unit of Production	$0.82	$1.48
Solution 4:
Cost of Units Transferred Out	EUP	Cost per EUP	current Cost	work in process,July 1	Total cost
Material	150000	$0.82	$1,23,000	$8,500	$1,31,500
Conversion	157000	$1.48	$2,32,360	$4,900	$2,37,260
Total transferred out					$3,68,760
Solution 3:
Cost of ending work in process	EUP	Cost per EUP	Total Cost
Material	20000	$0.82	$16,400
Conversion	8000	$1.48	$11,840
Total Ending work in process			$28,240

Solution 5:
Cost Reconciliation Report - July
Particulars	Amount
costs to be accounted for:
Cost of beginning WIP inventory ($8500+$4900)	$13,400
Cost added to production ($139400+$244200)	$3,83,600
Total Cost to be accounted for	$3,97,000
Costs accounted for as follows:
Cost of unit transferred out	$3,68,760
Cost of Ending WIP	$28,240
Total cost accounted for	$3,97,000