Question

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. (The currency in Fiji is the Fijian dollar.) Assume that the company uses the FIFO method rather than the weighted-average method in its process costing system.

		Percent Completed
	Units	Materials	Conversion
Work in process, beginning	21,200	100%	68%
Started into production	180,000
Completed and transferred out	150,000
Work in process, ending	51,200	100%	15%

	Materials	Conversion
Work in process, beginning	$26,600	$25,600
Cost added during June	$349,200	$222,059

Requirement 1:

Determine the equivalent units for June for the Blending Department.

	Materials	Conversion
Equivalent units of production

Requirement 2:

Compute the costs per equivalent unit for June for the Blending Department. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	Materials	Conversion
Cost per equivalent unit	$	$

Requirement 3:
(a)	Determine the total cost of ending work in process inventory. (Round your answers to the nearest dollar amount. Omit the "$" sign in your response.)

	Materials	Conversion	Total
Cost of ending work in process inventory	$	$	$

(b)	Determine the total cost of units transferred to the next process for the Blending Department in June. (Omit the "$" sign in your response.)

Cost of units transferred out

$

Answer 1

Required - (1)

Equivalent Units of production

	Physical	Material		Conversion
	Units	Units	%	Units	%
Ending work in process	51200	51200	100	7680	15
Beginning work in process	21200	0	0	6784	32
Started and finished	128800	128800	100	128800	100
Equivalent Units for June		180000		143264

For ending WIP, percentages are taken as given. For material equivalent units = 51200 * 100% = 51200 units and for conversion 51200 * 15% = 7680 units

For Beginning WIP ....... balance of percentages should be taken using FIFO method. That means if 100% is given we take 0% and 68% is given we take ....... 100 - 68 = 32%. Because, the given percentage of works were already done before June month and only balance % work is done in June month to complete them.

Started and completed = 150,000 - 21200 = 128800 ........ it will be 100% both for material and conversion.

Question - (2)

		Material		Coversion
Cost added during June		349200		222059
Equivalent Units for June		180000		143264
Cost per equivalent Unit		1.94		1.55

Question - (3)

(a) Cost of ending WIP inventory = 111,232

Materials cost = 1.94 * 51200 ..........= 99328

Conversion cost = 7680 * 1.55 .........= 11904

Total ..................................................= 111,232

(b) Cost of units transferred out = 512,227

Beginning WIP Inventory
Cost already incurred	52200
Material cost	0
Conversion Cost = 6784 * 1.55	10515
Total	62715
Started and transferred out
= 128800 * (1.94 + 1.55)	449512
Total cost of units transferred Out	512227

Answer 2

Requirement #1:

Equivalent units of production = Completed/transferred out units + WIP ending inventory

EQ units Materials = 150,000 + (51,200 * 100%) = 201,200