Question

Problem 5-15 Comprehensive Problem-Weighted-Average Method [LO5-2, LO5-3, LO5-4, LO5-5]

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	78,000	70%	40%
Started into production	384,000
Completed and transferred out	374,000
Work in process, ending	88,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	30,400	$	10,800
Cost added during June	$	326,000	$	230,760

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

Part-1 Statement showing Computation of Equivalent Unit- Weighted Average- Sunspot beverage
Particular	Whole units	Materials	Conversion
Unit Completed & Transferred	374000	374000	374000
Ending inventory	88000	66000	22000
Units accounted for	462000	440000	396000
Equivalent Unit of Production
	Materials	Conversion
Equivalent units of production	440000	396000

Part-2. Statement showing Cost per Equivalent Unit
Particular	Tototal	Material	Conversion
Beginning WIP inventory	$41,200.00	$30,400.00	$10,800.00
Current costs incurred	$556,760.00	$326,000.00	$230,760.00
Tototal cost to account for (a)	$597,960.00	$356,400.00	$241,560.00
Equivalent units (b)		440000	396000
Cost per Equivalent unit  (a/b)		$0.81	$0.61

Part-3: Computation of Ending WIP
Material (66000*0.81)	$53,460.00
Conversion (22000*0.61)	$13,420.00
Tototal Ending Work in process	$66,880.00
Part-4: Computation of Cost of units completed and transferred
Material (374000*0.81)	$302,940.00
Conversion (374000*0.61)	$228,140.00
Tototal	$531,080.00
Prt-5 : Cost Reconcilliation
Unit completed & transferred Out	$531,080.00
Ending WIP	$66,880.00
Tototal costs to be accounted for	$597,960.00
Cost Incurred
Beginning WIP	$41,200.00
Current cost incurred	$556,760.00
Total Cost to be accounnted for	$597,960.00