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 Materials Conversion 1008 750 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 20,000 180,000 160.000 40,000 100% 256 Work in process, beginning Cost added during June Materials Conversion $ 25,200 $ 24.800 $ 334,800 $238.700 Required: 1. Calculate the Blending Department's equivaleht 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) Equivalent unit

	Material	Conversion
Unit transferred out	160000	160000
Ending WIP	40000	10000
Equivalent unit of production	200000	170000

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	25200	24800
Cost added	334800	238700
Total cost	360000	263500
Equivalent unit	200000	170000
Cost per equivalent unit	1.8	1.55

3) Cost of ending WIP

	Material	Conversion	Total
Cost of ending WIP	40000*1.8 = 72000	15500	87500

4) Cost of unit transferred out

	Material	Conversion	Total
Cost of unit transferred out	288000	248000	536000

5) Cost reconciliation

Cost to be accounted for
Beginning WIP	50000
Cost added	573500
Total cost to be accounted for	623500
Cost accounted as
Cost of unit transferred out	536000
Cost of ending WIP	87500
Total cost accounted as	623500