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.

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.

Percent Completed Units Materials Conversion Work in process, beginning 66,000 70% 40% Started into production 333,000 Completed and transferred out 323,000 Work in process, ending 76,000 75% 25%

Explanation / Answer

Solution 1:

Solution 2:

Solution 3 & 4:

Solution 5:

Computation of Equivalent unit of Production - Weighted Average (Blending Department) Particulars Physical Units Material Conversion Unit completed & Transferred out 323000 323000 323000 Closing WIP: 76000 Material (75%) 57000 Conversion (25%) 19000 Equivalent units of production 399000 380000 342000

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