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	125,000	55%	50%
Started into production	199,000
Completed and transferred out	189,000
Work in process, ending	135,000	60%	40%

	Materials		Conversion
Work in process, beginning	$	14,300	$	4,100
Cost added during June	$	153,100	$	88,240

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

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

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

Answer 1

1	Equivalent units of production:
		Materials	Conversion
	Transferred to next department	189,000	189,000
	Ending work in process:
	Materials: 135,000 units x 60% complete	81000
	Conversion:135,000 units x 40% complete		54000
	Equivalent units of production	270,000	243,000
2	Cost per Equivalent Unit
		Materials	Conversion
	Cost of beginning work in process	$           14,300	$             4,100
	Cost added during the period	$        153,100	$           88,240
	Total cost (a)	$        167,400	$           92,340
	Equivalent units of production (b)	270,000	243,000
	Cost per equivalent unit, (a) ÷ (b)	$               0.62	$               0.38
3	Applying costs to units:
		Materials	Conversion	Total
	Ending work in process inventory:
	Equivalent units of production	81,000	54,000
	Cost per equivalent unit	$               0.62	$               0.38
	Cost of ending work in process inventory	$           50,220	$           20,520	$          70,740
4	Units completed and transferred out:
	Units transferred to the next department	189,000	189,000
	Cost per equivalent unit	$               0.62	$               0.38
	Cost of units completed and transferred out	$        117,180	$           71,820	$        189,000
5	Cost reconciliation:
	Costs to be accounted for:
	Cost of beginning work in process inventory	$           18,400
(14300+4100)
	Costs added to production during the period	$        241,340
(153100+88240)
	Total cost to be accounted for	$        259,740
	Costs accounted for as follows:
	Cost of ending work in process inventory	$           70,740
	Cost of units completed and transferred out	$        189,000
	Total cost accounted for	$        259,740