ANSWER QUESTIONS 1A, B, & C USING THE INFORMATION BELOW USE THE INFORMATION BELOW TO ANSWER QUESTIONS 1A, B, & C ABOVE Sunspot Beverages, Limited,
ANSWER QUESTIONS 1A, B, & C USING THE INFORMATION BELOW
USE THE INFORMATION BELOW TO ANSWER QUESTIONS 1A, B, & C ABOVE
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 |
Explanation
Calculate the Blending Department's equivalent units of production for materials and conversion in June.
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| | Materials | Conversion | Equivalent units of production | 360,000 | 324,000 | |
cost per equivalent unit for materials and conversion in June.
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| | Materials | Conversion | Cost per equivalent unit | $0.72 | $0.52 | |
The Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.
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| | Materials | Conversion | Total | Cost of ending work in process inventory | $38,880 | $9,360 | $48,240 | |
The Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.
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| | Materials | Conversion | Total | Cost of units completed and transferred out | $220,320 | $159,120 | $379,440 | |
The cost reconciliation report for the Blending Department for June.
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| 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 | |
Use the provided information and your work from Questions 8 of HW3.1 for Sunspot Beverages to complete the requirements for the project. Remember that Sunspot Beverages manufactures a product in two departments, Blending and Bottling. The company uses TWO Work-in-Process inventory accounts to track costs for each department. Once the product is completed in the Blending department, costs are transferred out of WIP-Blending and into WIP-Bottling. ROUND ALL NUMBERS TO WHOLE DOLLARS UNLESS OTHERWISE INSTRUCTED 1) Calculating Information to use for Second Department: The analysis you completed on connect for Sunspot Beverages relates to their FIRST department- Blending. We will use information from this department to calculate values for you to use in the SECOND department - Bottling later in the project. a) Units: Include the number of units in beginning and ending inventory for the Blending department in the table below - Blending column. (These can be found in the paragraph of given information of Question 8 on HW3.1). Multiply the units by the factors provided in the table to calculate the number of units for Bottling's beginning and ending inventory. Units in WIP-Bottling Blending (connect) Factor (multiply) Bottling Use in 36 Beginning # of units Ending # of units 1.20 0.80 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