Sunspot Beverages, Ltd., of Fiji makes blended tropical fruit drinks in two stag

Question

Sunspot Beverages, Ltd., of Fiji 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. Materials Conversion Units 20,000 100% Work in process, beginning Started into production Completed and transferred out Work in process, ending 75% 160,000 40,000 100% 25% Materials Conversion Work in process, beginning 25,200 24,800 Cost added during June S 334,800 S 238,700 Assume that the company uses the FIFO method rather than the weighted-average method in its process costing system.

Explanation / Answer

1 Materials Conversion Cost Units in beginning WIP (A) 20000 20000 % of completion of beginning WIP in previous period (B) 100% 75% % of beginning WIP completed this period [C=100%-B]                     -                                  0 Equivalent units in beginning WIP [D=A×C]                     -                         5,000 Units started and completed in current period (I) 140,000 140,000 Units closing WIP (E) 40,000 40,000 % of completion of closing WIP (F) 100% 25% Equivalent units in closing WIP (G=E×F) 40,000 10,000 Total equivalent units 180,000 155,000 2 Direct Material Conversion Costs Costs added during the period 334800 238700 Total Equivalent Units 180,000 155,000 Cost per equivalent unit (H)                 1.86                          1.54 3 Assignment of Costs Direct Material Conversion Costs Total Opening WIP            25,200                     24,800      50,000 Cost to complete beginning inventory (D*H)                     -                         7,700         7,700 Units started and completed (I*H)          260,400                   215,600    476,000 Total Cost of Units Completed and Transferred          285,600                   248,100    533,700 Ending Workin Progress (G*H)            74,400                     15,400      89,800 Total Costs Accounted for          360,000                   263,500    623,500 4 Blending Depatment Cost Reconcilaition Costs to be accounted for Cost of beginning work in progress inventory(25200+24800) 50000 Cost added to production during the period(334800+238700) 573500 Total Cost to be accounted for 623500 Cost accounted for as follows: Cost of ending work in process inventory (74400+15400)            89,800 Costs of Units transferred out (285600+248100)          533,700 Total Cost accounted for          623,500

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.