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 110,000 70% 40% Started into production 520,000 Completed and transferred out 510,000 Work in process, ending 120,000 75% 25% Materials Conversion Work in process, beginning $ 48,100 $ 17,900 Cost added during June $ 515,900 $ 381,700 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. Calculate the Blending Department's equivalent units of production for materials and conversion in June

	Material	Conversion
Unit transferred out	510000	510000
Ending work in process	120000*75% = 90000	120000*25% = 30000
Equivalent unit of production	600000	540000

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

	Material	Conversion
Beginning work in process	48100	17900
Cost added	515900	381700
Total Cost	564000	399600
equivalent unit	600000	540000
Cost per equivalent unit	0.94	0.74

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

	Material	Conversion	Total
Cost of ending work in process	90000*.94 = 84600	30000*.74 = 22200	106800

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

	Material	Conversion	Total
Cost of units transferred out	510000*.94 = 479400	510000*.74 = 377400	856800

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

Cost to be accounted for
Beginning work in process	66000
Cost added	897600
Total Cost to be accounted for	963600
Cost accounted as
Cost of units transferred out	856800
Cost of ending work in process	106800
Total Cost accounted as	963600