Question

Eire Products is a speciality lubricants company. The Lake plant produces a single product in three departments: filtering, blending, and packaging. Additional materials are added in the blending process when units are 50 to 55 % complete with respect to conversion. Information for operations in June in the Blending process appear as follows:

Work in Process on June 1 consists of 10,400 barrels with the following costs

	Amount	Degree of Completion
Filtering costs transferred in	$10,960	100%
Costs added in Blending
Direct Materials	$ 0	0%
Conversion Costs	19,490	30%
	$19,490
Work in Process June 1	$30,450

During June, 123,000 barrels were transferred in from filtering at a cost of $255,840. The following costs were added in Blending in June.

Direct Materials	$ 505,920
Conversion Costs	753,550
Total Costs added	$1,260,470

Blending finished 122,000 barrels in June & transferred them to packaging. At the end of June, there were 11,400 barrels in work in process inventory. The units were 60% complete with respect to conversion costs.

The blending department uses the weighted-average method of process costing. The filtering department at Eire uses the FIFO method of process costing. The costs analyst in Blending has learned that if the filtering department at Eire had used the weighted average method, the amount of costs transferred in from the filtering world have been $12,440 in the beginning work in process & $158,060 for the amount transferred in this month.

Requirement:

Prepare a production costs report for June for the BLENDING department.

( can you please add notes in how you got the answers. I included the table for the answers and will star them(*))

EIRE PRODUCTS
Blending Department
Production Cost Report—Weighted-Average
	Physical units	Total Costs	Prior Department Costs	Materials	Conversion
Flow of Production Units
Units to be accounted for:
Beginning WIP inventory	*
Units started this period	*
Total units to be accounted for	0
Units accounted for:
Units completed and transferred out:
From beginning inventory	*
Started and completed currently	*
Total transferred out	0		*	*	*
Units in ending WIP inventory	*		*	*	*
Total units accounted for	0		0	0	0
Costs to be accounted for:
Costs in beginning WIP inventory		*	*	*	*
Current period costs		*	*	*	*
Total costs to be accounted for		$0	$0	$0	$0
Cost per equivalent unit:
Prior department costs			*
Materials				*
Conversion					*
Costs accounted for:
Costs assigned to units transferred out:
Prior department costs		*	*
Materials		*		*
Conversion		*			*
Total costs of units transferred out		$0
Costs assigned to ending WIP inventory:
Prior department costs		*	*
Materials		*		*
Conversion		*			*
Total ending WIP inventory		$0
Total costs accounted for		$0	$0	$0	$0

Answer 1

ANSWER:

EIRE PRODUCTS
BLENDING DEPARTMENT
Production cost report- Weighted Average
	Physical units	Total costs	Prior department costs	Materials	Conversion
Flow of production units
Units to be accounted for:
Beginning WIP inventory	10,400
Units started this period	123,000
Total units to be accounted for	133,400
Units accounted for:
Units completed and transferred out:
From beginning inventory	10,400
Started and completed currently	111,600 (122,000 – 10,400)
Total transferred out	122,000		122,000 (122,000*100%)	122,000 (122,000*100%)	122,000 (122,000*100%)
Units in ending WIP inventory	11,400		11,400 (11,400 * 100%)	11,400 (11,400 * 100%)	6,840 (11,400 * 60%)
Total units accounted for	133,400		133,400	133,400	128,840
Cost to be accounted for
Costs in beginning WIP inventory		30,450 (10,960+19,490)	10,960	0	19,490
Current period costs		1,515,310 (255,840+505,920+753550)	255,840	505,920	753,550
Total costs to be accounted for		1,545,760	266,800	505,920	773,040
Cost per equivalent unit: (total cost / total unit)
Prior department costs			2
Materials				3.79
Conversion					6
Costs accounted for
Costs assigned to unit transferred out: (total transferred out * costs per equivalent unit)
Prior department costs		244,000	244,000
Materials		462,380		462,380
Conversion		732,000			732,000
Total cost of units transferred out		1,438,380
Cost assigned to ending WIP inventory (units in ending WIP inventory * cost per equivalent unit)
Prior department costs		22,800	22,800
Material		43,206		43,206
Conversion		41,040			41,040
Total costs accounted for		107,046	266,800	505,586	773040