Powers Potables blends high-protein smoothies and packages them for sale to major grocery stores. It uses a mix of natural ingredients and vitamins to differentiate itself from its competitors. The company uses a FIFO process costing system to cost its products in two departments: Blending and Packaging. Direct ingredients are added at the beginning of the process in each department and conversion costs are incurred evenly throughout the process.

The following production and cost data are available for February for the Blending department: Work in Process (beginning) 80,000 units

Units started 256,000

Good units transferred to Packaging 280,000

Work in process (ending) 48,000

direct Materials Conversion

Beginning inventory costs $ 250,000 $ 379,840

Costs added $1,361,920 $1,692,800

At the beginning of the period the work-in-process was 40% complete. Ending WIP was 80% complete as to conversion costs. Inspection is done at the end of the blending process and just before any product is transferred to Packaging. Normal spoilage is considered to be 2% of good units that pass inspection and are transferred out.

a. Complete the attached Production Cost Report for the Blending department using the FIFO approach. (14 marks)

b. Show the journal entries for the addition of materials and conversion costs in the Blending department, transferring product to the packaging department, and for abnormal spoilage. (6 marks