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. (The currency in Fiji is the Fijian dollar.)
Assume that the company uses the weighted-average method.
(c) Determine the total cost of ending work in process inventory and the total cost of units transferred to the Bottling Department.

Answer 1

The total cost of ending work in process inventory is $87,500 and the total cost of units transferred to the Bottling Department $536,000.

What is weighted average ?

The weighted normal calculation accounts for the various levels of statistical significance among the data points in either a data collection. Each value in this data collection is multiplied by a predetermined weight before the final calculation to produce a weighted normal.

A weighted normal, which gives each figure in a data collection equal weights, can be more accurate than a plain normal.

When calculating a simple normal, also known as the computation mean, all numbers are given equal weight and are scored in reverse, A weighted average's allotted weights,

Here, Equivalent unit of production = 40,000,   conversion = 10,000

         Cost per equivalent unit = $1.80,   conversion = $1.56

Thus,

Cost of ending work in process inventory = $72,000,   conversion = $15,500

Total cost = $87,500

and, units transferred to the next department = 160,000,   conversion = 160,000

Cost per equivalent unit = $1.80,   conversion = $1.56

Thus,

Cost of units completed and transferred out = $288,000,   conversion = $248,000

Total cost = $536,000

So, The total cost of ending work in process inventory is $87,500 and the total cost of units transferred to the Bottling Department $536,000.

Learn more about weighted average method here:

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