Tropical sun Ltd. makes suntan lotion in two stages. The lotion is first blended

Question

Tropical sun Ltd. makes suntan lotion in two stages. The lotion is first blended in the Blending Department and then bottled and packed in the Bottling Department. The following information relates to the operations of the Blending Department for May.

_____Percent Completed_____
________                                Units---------  Materials ___ Conversion
Work in Process, beginning   7,500                80%                    55%
Started into production              97,000
Completed and transferred out 92,000
Work in Process, ending 1       2,000               65%                   20%

_________Costs ($)__________
Work in Process, beginning   $ 7,000        $ 8,000
Costs added during May         $106,473    $143,632

Required:

Prepare a production report for the Blending Department for May. (Round cost percent to two decimal places and cost reconciliation amounts to nearest dollar.)

Explanation / Answer

Hi,

Please find the answer as follows:

Notes:

Ending WIP = Material = 12000*65% = 7800 units

Ending WIP = Conversion = 12000*20% = 2400 units

Thanks.

Production Report Units in Beginning WIP
7500

Units Started during WIP
97000

Units to Account For
104500

Units Completed and Transferred to Bottling
92000

Units in Ending WIP
12000

Units Accounted For
104000






Material Cost Per Equivalent Unit (7000 + 106473)
113473

Conversion Cost Per Equivalent Unit (8000 + 143632)
151632

Total cost
265105









Material Conversion Units Completed and Transferred

92000 92000 Ending WIP Units

7800 2400 Total Units

99800 94400 Cost Per Equivalent Unit (Total Cost/Total Units)

2.66 2.81

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