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.	Determine the equivalent units for July for the Blending Department.

  

        

2.	Compute the costs per equivalent unit for July for the Blending Department. (Round your answers to 2 decimal places.)

  

      

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process for the Blending Department in July.

  

                

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

  

Answer 1

Determine the equivalent units for July for the Blending Department.

Unit transferred out = 10000+170000-20000 = 160000

Equivalent unit of material = (10000*0%+150000*100%+20000*100%) = 170000

Equivalent unit of conversion = (10000*70%+150000*100%+20000*40%) = 165000

2) Compute the costs per equivalent unit for July for the Blending Department. (Round your answers to 2 decimal places.)

Cost per equivalent unit of material = 139400/170000 = 0.82

Cost per equivalent unit of conversion = 244200/165000 = 1.48

3) Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process for the Blending Department in July.

Cost of Ending work in process = (20000*.82+20000*40%*1.48) = 28240

Cost of unit transferred out = (0.82*150000+1.48*157000)+(8500+4900) = 368760

4) Prepare a cost reconciliation report for the Blending Department for July.

Cost to be accounted for
Beginning work in process	13400
Cost added	383600
Total cost to be accounted for	397000
Cost accounted as
Cost of unit transferred out	368760
Cost of ending work in process	28240
Total cost accounted as	397000