Answer:
Explanation:
beginning WIP 20,000
materials 100% completed
conversion 75% completed (25% added in current period 5,000 EU)
started into production 180,000 units
completed and transferred out 160,000 units
units started and transferred out = 180,000 - 20,000 - 40,000 = 120,000 units
ending WIP 40,000 units
materials 100% completed
conversion 25% completed (10,000 EU)
beginning costs:
materials $25,200
conversion $24,800
added during the period:
materials $334,800
conversion $238,700
1. Compute the Blending Department's equivalent units of production for materials and conversion for June.
EUP for materials = 180,000 units
EUP for conversion = 5,000 + 120,000 + 10,000 = 135,000
2. Compute the Blending Department's cost per equivalent unit for materials and conversion for June.
cost per EUP for materials = $334,800 / 180,000 = $1.86
cost per EUP for conversion = $238,700 / 135,000 = $1.768148
3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.
materials = 40,000 x $1.86 = $74,400
conversion = 10,000 x $1.768148 = $17,681.50
total = $92,081.50
4. Calculate the Blending Department's cost of units transferred out to the next department for materials, conversion, and in total for June.
materials = (140,000 x $1.86) + $25,200 = $285,600
conversion = (125,000 x $1.7681) + $24,800 = $245,818.50
total = $531,418.50
5. Prepare a cost reconciliation report for the Blending Department for June.
Beginning WIP:
Cost already incurred $50,000
- Material cost 0
- Conversion Cost = 5,000 x $1.768148 = $8,840.75
Total $58,840.75
Started and transferred out
- materials 140,000 x $1.86 = $260,400
- conversion costs 120,000 x $1.768148 = $212,177.75
- total $472,577.75
Total cost of units transferred out $531,418.50
