Question

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

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	56,000	70%	40%
Started into production	290,500
Completed and transferred out	280,500
Work in process, ending	66,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	19,100	$	5,900
Cost added during June	$	205,300	$	124,780

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

• All working forms part of the answer
• Requirement 1

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	280,500	100%	280,500	100%	280,500
Units of ENDING WIP	66,000	75%	49,500	25%	16,500
Equivalent Units of Production			330,000		297,000

• Requirement 2

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          19,100.00		$                                   5,900.00
Cost incurred during the period			$        205,300.00		$                                124,780.00
Total Costs		Costs	$        224,400.00	Costs	$                                130,680.00
Equivalent units of production		EUP	330,000	EUP	297,000
Cost per EUP			$              0.68000		$                                      0.44000

• Requirement 3

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	49,500	$                      0.68	$          33,660.00
- Conversion	16,500	$                      0.44	$             7,260.00
Total cost of ending WIP				$              40,920.00

• Requirement 4

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Direct Materials	280,500	$                      0.68	$        190,740.00
- Conversion	280,500	$                      0.44	$        123,420.00
Total Cost transferred Out				$            314,160.00

• Requirement 5

Reconciliation

Costs to be accounted for
Beginning WIP		[19100 + 5900]	$                25,000
Started into production		[205300 + 124780]	$             330,080
Total costs			$             355,080
Cost Reconciliation Schedule
Costs accounted for
Transferred out		[Requirement 4]	$             314,160
Work in process, July 31
Materials	[Requirement 3]	$              33,660
Conversion costs	[Requirement 3]	$                7,260	$                40,920
Total costs			$             355,080