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 20,000 100% 75% Started into production 180,000 Completed and transferred out 160,000 Work in process, ending 40,000 100% 25% Materials Conversion Work in process, beginning $ 25,200 $ 24,800 Cost added during June $ 334,800 $ 238,700 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

1. Blending Department

Equivalent units of production (EUP)

Units %material EUP %Conversion EUP

Units Completed and 160000 100% 160000 100% 160000

transferred out

Units of Ending work 40000 100% 40000 25% 10000

in process

Equivalent units of production 200,000 170,000

2. Cost per Equivalent unit

Material Conversion

Cost of Beginning Work in Process $25,200 $24,800

Cost added during June $3,34,800 $238,700

Total Costs $360,000 $263,500

/Equivalent units of Production 200000 170000

Cost per Equivalent unit of Production $1.80 $1.55

3. Cost of ending WIP

EUP Cost per EUP Total Cost

Material 40000 $1.80 $72,000

Conversion 10000 $1.55 $15,500

Total Ending work in process $87,500

4. Cost of Units Transferred Out

EUP Cost per EUP Total Cost

Material 160000 $1.80 $288,000

Conversion 160000 $1.55 $248,000

Total transferred out $536,000

5. Blending Department

Cost Reconciliation Report

Particulars Amount

Costs to be accounted for

Cost of beginning WIP inventory $50,000

($25200+$24800)

Cost added to production $573,500

($334800+$238700)

Total Cost to be accounted for $623,500

Costs accounted for as follows:

Cost of unit transferred out $536,000

Cost of Ending WIP $87,500

Total cost accounted for $623,500