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	100,000	70%	40%
Started into production	477,500
Completed and transferred out	467,500
Work in process, ending	110,000	75%	25%

	Materials	Conversion
Work in process, beginning	$ 41,300	$ 15,100
Cost added during June	$ 442,700	$ 321,500

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

Weighted-Average Method

1.

Equivalent units of production:

	Materials	Conversion
Transferred to next department	467,500	467,500
Equivalent units in ending work in process inventory:
Materials: 110,000 units 75% complete	82,500
Conversion: 110,000 units 25% complete		27,500
Equivalent units of production	550,000	495,000

2.

Cost per equivalent unit:

	Materials	Conversion
Cost of beginning work in process	$ 41,300	$ 15,100
Cost added during the period	442,700	321,500
Total cost (a)	$ 484,000	$ 336,600
Equivalent units of production (b)	550,000	495,000
Cost per equivalent unit (a) (b)	$ 0.88	$ 0.68

3. & 4.

Assigning costs to units:

	Materials	Conversion	Total
Ending work in process inventory:
Equivalent units	82,500	27,500
Cost per equivalent unit	$ 0.88	$ 0.68
Cost of ending work in process inventory	$ 72,600	$ 18,700	$ 91,300
Units completed and transferred out:
Units transferred to the next department	467,500	467,500
Cost per equivalent unit	$ 0.88	$ 0.68
Cost of units completed and transferred out	$ 411,400	$ 317,900	$ 729,300

5.

Cost reconciliation:

Cost of beginning work in process inventory ($41,300 + $15,100) = $56,400

Costs added to production during the period ($442,700 + $321,500) = $764,200