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

ID: 2416125 • Letter: O

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: Percent Completed Units Mixing Materials Conversion Work in process inventory, September 1 4 100% 60% 50% Work in process inventory, September 30 4 100% 20% 10% Mixing Materials Conversion Work in process inventory, September 1 $ 9,540 $ 160 $ 1,440 Cost added during September $ 266,180 $ 17,304 $ 154,848 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, 118 batches (i.e., units) were completed and transferred to the Packaging Department. Required: 1. Determine the equivalent units for September for mixing, materials, and conversion. (Round your answers to 1 decimal place.)

2. Compute the costs per equivalent unit for September for mixing, materials, and conversion. (Round your intermediate calculations to 1 decimal place. Round your final answers to the nearest whole dollar.)

Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department in September. (Round your intermediate calculations to 1 decimal place. Round your answers to the nearest whole dollar.)

Prepare a cost reconciliation report for the Casing and Curing Department for September. (Round your final answers to the nearest whole dollar.)

Explanation / Answer

Requirement 1:

The equivalent units for September for mixing, materials, and conversion is calculated with the use of following table:

__________

Requirement 2:

The cost per equivalent unit is calculated with the use of following table:

__________

Requirement 3:

The cost of ending work in process and units transferred to the next department is calculated with the use of following table:

__________

Requirement 4:

The cost reconciliation report is given below:

Mixing Materials Conversion Units Transferred to Next Department 118 118 118 Ending Work in Process Mixing (4*100%) 4 Material (4*20%) 0.8 Conversion (4*10%) 0.4 Equivalent Units of Production 122 118.8 118.4

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Old Country Links Inc. produces sausages in three production departments-Mixing,

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

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

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