8. Sunspot Beverages, Limited, 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.

	Units	Percent Completed
		Materials	Conversion
Work in process, beginning	62,000	70%	40%
Started into production	316,000
Completed and transferred out	306,000
Work in process, ending	72,000	75%	25%

	Materials	Conversion
Work in process, beginning	$ 22,100	$ 7,600
Cost added during June	$ 237,100	$ 160,880

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.

Explanation

Calculate the Blending Department's equivalent units of production for materials and conversion in June.

	Materials	Conversion
Equivalent units of production	360,000	324,000

Calculate the Blending Department's cost per equivalent unit for materials and conversion in June. (Round your answers to 2 decimal places.)

	Materials	Conversion
Cost per equivalent unit	$0.72	$0.52

Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June. (Round your intermediate calculations to 2 decimal places.)

	Materials	Conversion	Total
Cost of ending work in process inventory	$38,880	$9,360	$48,240

Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June. (Round your intermediate calculations to 2 decimal places.)

	Materials	Conversion	Total
Cost of units completed and transferred out	$220,320	$159,120	$379,440

Prepare a cost reconciliation report for the Blending Department for June. (Round your intermediate calculations to 2 decimal places.)

Blending Department
Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory	$29,700
Costs added to production during the period	397,980
Total cost to be accounted for	$427,680
Costs accounted for as follows:
Cost of ending work in process inventory	$48,240
Cost of units completed and transferred out	379,440
Total cost accounted for	$427,680

b) Beginning Inventory Costs for Bottling: The Bottling department will have 4 categories of costs for its process costing calculations; Blending Costs (transferred in from first department), Bottling costs (one category of direct material), Other direct material (a 2nd category of direct material) and Conversion costs (category combining direct labor and overhead). Sunspot Beverages treats the costs of bottles as a separate cost category. These are added to production at the beginning of the production process. For the cost in the Bottling department's beginning inventory, use the BEGINNING costs for material and conversion from the Blending department (connect) and the factors provided below to calculate the other direct material and conversion costs in beginning inventory for Bottling department. Add all cost categories together for the Total Costs. These amounts should be the beginning balance in the T accounts at the top of the project. Blending Cost Category Costs in Beginning WIP-Bottling Blending Costs Factor Bottling Cost (connect) (multiply) Category Category Costs in Beginning WIP Use in 3a $ 90,000 45,000 N/A N/A N/A N/A Direct Material Costs Conversion Costs Total Costs given value given value 4 6 Blending Bottling Other DM Conversion c) Costs Added (increases) to Bottling department: Include the amount from your Q8 "costs for units completed and transferred out" as "blending costs (transferred IN) in the far-right column. Use the direct material costs ADDED during June for the first department to calculate BOTH the Bottling costs and Other DM costs added in June for the second department-Bottling (use the respective factors.) Use the conversion costs added in June for the first department (Blending Department) to calculate the conversion cost for the second department (Bottling Department) WIP-Bottling Costs Incurred Use in 3a Blending Cost Category "transferred OUT Direct Material Costs Direct Material Costs Conversion Costs Costs Added/Incurred in WIP-Bottling Blending Costs Factor (connect) (multiply) Cost Category N/A Blending (trans IN) 1.2 Bottling 2.4 Other DM 3.4 Conversion Total Costs Added/Incurred