Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process

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 70% Work in process, beginning Started into production Completed and transferred out Work in process, ending 40% 52,000 273,500 263,500 62,000 75% 25% Work in process, beginning Cost added during June Materials Conversion $ 17,500 5,300 $ 187,100 ? 111,880

Explanation / Answer

1 Equivalent units of production Materials Conversion Transferred to next department 263500 263500 Ending work in progress Materials 62000*75% 46500 Conversion 62000*25% 15500 Equivalent units of production 310000 279000 1 Equivalent units of production 310000 279000 2 Cost per equivalent unit Materials Conversion Cost of beginning work in progress 17500 5300 cost added during the period 187100 111880 Total Cost (a) 204600 117180 Equivalent units of production (b) 310000 279000 Cost per equivalent unit a/b 0.66 0.42 2 Cost per equivalent unit 0.66 0.42 Materials Conversion Total Ending work in progress inventory 46500 15500 62000 Cost per equivalent unit 0.66 0.42 Cost of ending work in progress inventory 30690 6510 37200 Units Completed and transferred out Units transferred to the next department 263500 263500 Cost per equivalent unit 0.66 0.42 Cost of units completed and transferred out 173910 110670 284580 Cost of ending work in progress inventory 37200 Cost of units completed and transferred out 284580 Blending Department Cost reconciliation Cost of beginning work in progress inventory 22800 Cost added to production during the year 298980 Total cost to be accounted for 321780 Cost accounted for as follows Cost of ending work in progress inventory 37200 Cost of units completed and transferred out 284580 Total cost to be accounted for 321780

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