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 20,000 100% 75%
Started into production 180,000
Completed and transferred out 160,000
Work in process, ending 40,000 100% 25%
Materials Conversion
Work in process, beginning $ 25,200 $ 24,800
Cost added during June $ 334,800 $ 238,700
Required:
Assume that the company uses the weighted-average method.
1. Determine the equivalent units for June for the Blending Department.
2. Compute the costs per equivalent unit for the Blending Department. (Round your answers to 2 decimal places.)
3. Determine the total cost of ending work in process inventory and the total cost of units transferred
to the Bottling Department.
4. Prepare a cost reconciliation report for the Blending Department for June.

Explanation:

1

Equivalent units for June

Completed and transferred out - 160,000

Materials = 40,000*100                     40,000

                                                          200,000

Completed and transferred out - 160,000

Conversion = 40,000*25%              10,000

                                                         170,000

2

Cost per equivalent unit

                                        Materials      Conversion

Opening WIP                    25,200        24,800

Cost in June                     334,800       238,700

Total cost                         360,000      263,500

Units of production           200,000       170000

Unit cost                      360000/200000 263500/170000

                                                 1.8                   1.55

3

Cost of ending WIP in process inventory and the total cost of units transferred

                                            Materials         Conversion

Equivalent units                    40,000               10,000

Cost per unit                              1.8                       1.55

Cost on ending WIP                 72,000               15,500

Total departmental cost = 87,500

Units completed & transferred    160,000          160,000    

Cost per unit                                     1.8                      1.55

Cost                                                 288,000          248,000

Total cost = 536,000

4

Reconciliation report

Beginning Work in Progress = 25,200 + 24,800= 50,000

Added cost to production = 334,800 + 238,700 = 573,500

answer: d. characteristics of guests

explanation: it is directly related to the spending characteristics of attendees who fall into each of these categories: