Question

Problem 4-15A Comprehensive Problem-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5]

Sunspot Beverages, Ltd., of Fiji 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	46,000	70%	40%
Started into production	248,000
Completed and transferred out	238,000
Work in process, ending	56,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	15,100	$	4,400
Cost added during June	$	161,300	$	93,880

Required:

Assume that the company uses the weighted-average method.

1.	Determine the equivalent units for June for the Blending Department.

  

2.	Compute the costs per equivalent unit 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 Bottling Department. (Do not round your intermediate calculations.)

  

4.	Prepare a cost reconciliation report for the Blending Department for June. (Do not round your intermediate calculations.)

  

Answer 1

Units completed and transfer = 238000 units

1. Computation of Equivalent units of production

	Material	Conversion cost
Completed and Transfered	238000	238000
Ending Inventory	42000	14000
Total Equivalent Units	280000	252000

2. Computation of the cost per equivalent unit

	BI (costs)	+ Started (Costs)	/ Equivalent Units	= Unit Cost
Materials	15100	161300	280000	0.63
Conversion cost	4400	93880	252000	0.39
Total unit cost				1.02

3. Cost of Ending work in process inventory and units transferout.

Cost of Ending work in process inventory
Material	42000*0.63	26460
Conversion cost	14000*0.39	5460
Total Cost of Ending work in process inventory		31920
Cost of Units Transfer out	238000*1.02	242760

4. Cost reconciliation report for the month

Cost to be accounted for
Work in process inventory, May 1	19500
Cost added during May	255180
Total cost to be accounted for	274680
Cost Accounted for as follow
Cost of Ending work in process inventory	31920
Cost of Units Transfer out	242760
Total Cost Accounted for	274680