Old Country Links, Inc., produces sausages in three production departments—Mixin

Question

Old Country Links, Inc., produces sausages in three production departments—Mixing, Casing and Curing, and Packaging. In the Mixing Department, meats are prepared and ground and then mixed with spices. The spiced meat mixture is then transferred to the Casing and Curing Department, where the mixture is force-fed into casings and then hung and cured in climate-controlled smoking chambers. In the Packaging Department, the cured sausages are sorted, packed, and labeled. The company uses the weighted-average method in its process costing system. Data for September for the Casing and Curing Department follow:

Mixing cost represents the costs of the spiced meat mixture transferred in from the Mixing Department. The spiced meat mixture is processed in the Casing and Curing Department in batches; each unit in the above table is a batch and one batch of spiced meat mixture produces a set amount of sausages that are passed on to the Packaging Department. During September, 95 batches (i.e., units) were completed and transferred to the Packaging Department.

Required:

1. Determine the Casing and Curing Department's equivalent units of production for mixing, materials, and conversion for the month of September.

2. Compute the Casing and Curing Department's cost per equivalent unit for mixing, materials, and conversion for the month of September.

3. Compute the Casing and Curing Department's cost of ending work in process inventory for mixing, materials, conversion, and in total for September.

4. Compute the Casing and Curing Department's cost of units transferred out to the Packaging Department for mixing, materials, conversion, and in total for September.

Units Mixing Materials Conversion Work in process inventory, September 1 3 100% 60% 50% Work in process inventory, September 30 3 100% 20% 10%

Explanation / Answer

1 Mixing Materials Conversion Units completed and transferred 95 95 95 Work in process inventory, September 30 3 0.6 0.3 Equivalent units of production 98 95.6 95.3 2 Mixing Materials Conversion Work in process inventory, September 1 5544 18 423 Cost added during September 165956 13653 107266 Total costs 171500 13671 107689 Divided by Equivalent units of production 98 95.6 95.3 Cost per equivalent unit 1750 143 1130 3 Mixing Materials Conversion Total Work in process inventory, September 30 units 3 0.6 0.3 Cost per equivalent unit 1750 143 1130 Cost of ending work in process inventory 5250 86 339 5675 4 Mixing Materials Conversion Units completed and transferred 95 95 95 Cost per equivalent unit 1750 143 1130 Cost of ending work in process inventory 166250 13585 107350 287185

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