Selzik Company makes super-premium cake mixes that go through two processing dep

Question

Selzik Company makes super-premium cake mixes that go through two processing departments, Blending and Packaging. The following activity was recorded in the Blending Department during July: Production data: Units in process, July 1 (materials 100% complete, conversion 30% complete) Units started into production Units in process, July 31 (materials 100% complete, conversion 40% complete) 10,000 170,000 20,000 Cost data: Work in process inventory, July 1: Materials cost Conversion cost $ 8,500 $ 4,900 Cost added during the month: Materials cost Conversion cost $139,400 $ 244,200 All materials are added at the beginning of work in the Blending Department. The company uses the FIFO method in its process costing system.

Explanation / Answer

Equivalent unit :

Cost per equivalent unit of material = 139400/170000 = 0.82 per equivalent unit

Cost per equivalent unit of conversion = 244200/165000 = 1.48 per equivalent unit

Prepare cost reconciliation :

Physical unit % EUP-material % EUP-conversion Beginning work in process 10000 0% 0 70% 7000 units started and completed 150000 100% 150000 100% 150000 Ending work in process 20000 100% 20000 40% 8000 Total equivalent unit of production 180000 170000 165000

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