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.

		Percent Completed
	Units	Materials	Conversion
Work in process, beginning	70,000	70%	40%
Started into production	350,000
Completed and transferred out	340,000
Work in process, ending	80,000	75%	25%

	Materials		Conversion
Work in process, beginning	$	25,900	$	9,000
Cost added during June	$	278,100	$	192,600

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.

6. Use these Inventory T-accounts for Sunspot Beverages month of June as directed in the requirements.

WIP-Blending, WIP-Bottling, Raw Material Inventory(Bal 6/1 120,000 Bal 6/30 98,000), Finished Goods Inventory, ( Bal 6/1 -0- Bal 6/30 -0-)

7. Accounting for first department: For the BLENDING Department:

a) Use the information given in CONNECT and include the June beginning account balance for WIP-Blending in the T account above.

b) Use the given information and your results from CONNECT to write the journal entries for the following transactions as the relate to the account WP-Blending during June.

i) Direct Material requested and added to the Blending department during June.

ii) Assume 45% of the Conversion costs are direct labor. Write the journal entry to record the wages for June in the Blending Department.

iii) Write the journal entry to record the overhead applied to the Blending Department for June. Remember Conversion costs are direct labor and overhead.

iv) Write the journal entry to record the costs for the items completed and transferred out of Blending Department and moved/added to Bottling Department. This JE should DECREASE WIP-Blending account and INCREASE WIP-Bottling account. The dollar amount of this JE should be your answer in the 2nd to last row in the table of requirement 5 on CONNECT.

c) Post the journal entries from b) above to the T-accounts above. Determine the ending balance for WIP-Blending. The ending balance should equal the dollar value in the top row of requirement 3 in the info above problem. Check that it does.

The requirements below relate to June activity in the SECOND department, (BOTTLING Department, the department AFTER Blending that was analyzed in the info above). In the Bottling department, the juice is portioned into bottles and packaged into cartons for shipping. The Bottling department uses Direct Material (the bottles) at the beginning of the process, while other materials and conversion costs are added evenly throughout rest of the process. Hint: You can treat the bottles as a separate cost category from the other material. The Bottling department will have a total of 4 cost categories: Bottles, Other Material, Conversion and Blending or Transferred in costs. The transferred in costs are costs that were incurred during the Blending Process before items were brought to Bottling. These items are complete with respect to the Blending process BUT NOT complete with respect to bottling process. You will now analyze the Bottling Department activity for the month of June. The following information pertains to the operations of the Bottling Department for the month of June.

						Percent Complete
	units			Other Material				Conversion
Work in process, beginning	44,000			50%				40%
Work in process, ending	52,000			65%				50%
Cost Category					Work in Process, beginning			Summary: Costs Added during June
Transferred in from Blending					$ 55,000
Cost of Bottles					111,000
Other Material Costs					18,000
Conversion Costs					80,500
Total					$ 264,500

8. Accounting for second department: Answer the following relating to the account WIP-Bottling.

1. What is beginning balance in the WIP-Bottling account? __________________ Include the balance appropriately in the T-account for WIP Bottling below.

2. Include the amount from your journal entry 1b (iv) above in the summary of costs added during June for the first row (cost category) Transferred in from Blending.

3. The Bottling Department requisitions bottles and other material (raw material) throughout the month from Raw Material Inventory.

1. Assume the cost of the bottles added to the Bottling Department is $2.50 per unit transferred from Blending. Calculate the bottles cost and include it in the Costs Added during June table above. (Bottle Costs = # of units transferred in x $2.50)

1. 2. Assume Other Material is requisition for the Bottling department was half the material costs added to Blending department (CONNECT) from Raw Material Inventory. Calculate the cost of Other Material and include it in Costs Added during June table above.
2. 3. Write the summary journal entry to record the requisition of direct material (Bottles AND Other Material) for the Bottling department during June.
3. 4. Post the JE to the T-account for WIP-Bottling above.

1. 4. Assume Conversion costs added to the Bottling department during June is three times the conversion costs added (3 times) to the Blending department during June (from the info above) and consist of 40% direct labor and the rest overhead.
2. 1. Include conversion costs added to the Bottling Department during June for the cost category Conversion in the table above under Costs Added During June.

2. Write the summary journal entry to record the added conversion costs to WIP-Bottling. Post the JE to the T account for WIP-Bottling above.

5. Total the Costs Added During June column in the table above.