Question

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	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

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.

Answer 1

1) Equivalent unit

	Whole Unit	EUP-Material	EUP-Conversion
Unit transferred out	306000	306000	306000
Ending WIP	72000	72000*75% = 54000	18000
equivalent unit	378000	360000	324000

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	22100	7600
Cost added	237100	160880
Total Cost	259200	168480
Equivalent unit	360000	324000
Cost per equivalent unit	0.72	0.52

3) Cost of ending WIP

	Material	Conversion	Total
Cost of ending WIP	54000*.72 = 38880	18000*.52 = 9360	48240