Old Country Links, Inc., produces sausages in three production departments-Mixin
ID: 2540367 • 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 Work in process inventory, September 30 100% 100% 50% 60% 20 % Work in process inventory, September 1 Cost added during September Mixing Materials Conversion 531 6,399 190,298 17,984 171,931 $ 17,622 $ 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, 104 batches (i.e. units) were completed and transferred to the Packaging Department. Requirec 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 5. Prepare a cost reconciliation report for the Casing and Curing Department for SeptemberExplanation / Answer
Answer
Reconciliation of Units
Opening WIP
9
Introduced
104
TOTAL
113
Transferred
104
Closing WIP
9
Statement of Equivalent Units
Mixing
materials
Conversion Cost
Units
Complete %
Equivalent units
Complete %
Equivalent units
Complete %
Equivalent units
Transferred
104
100%
104
100%
104
100%
104
Closing WIP
9
100%
9
20%
1.8
10%
0.9
Total Units
113
Total
113
Total
105.8
Total
104.9
Cost per Equivalent Units
COST
Mixing
Materials
Conversion cost
TOTAL
Opening + Current cost
$207920
$18515
$178330
$404765
Total Equivalent Units
113.00
105.80
104.90
Cost per Equivalent Units
$1840.00
$175.00
$1700.00
$3715.00
Statement of cost
Cost
Cost/unit ($)
Closing WIP
Transferred
Units
Cost Allocated ($)
Units
Cost Allocated ($)
Mixing
1840.0
9
16560
104
191360
Materials
175.0
1.8
315
104
18200
Conversion cost
1700.0
0.9
1530
104
176800
Total
3715.0
0
0
TOTAL
$18405
TOTAL
$386360
Total cost to be accounted for
Mixing
Materials
Conversion
TOTAL
WIP Sept 1
17622
531
6399
Cost added
190298
17984
171931
Total
207920
18515
178330
$404765
Cost accounted for
Ending WIP:
EUP
9
1.8
0.9
Cost per EUP
1840
175
1700
Cost allocated
16560
315
1530
$18405
Units transferred
EUP
104
104
104
Cost per EUP
1840
175
1700
Cost allocated
191360
18200
176800
$386360
Total cost accounted for
$404765
Reconciliation of Units
Opening WIP
9
Introduced
104
TOTAL
113
Transferred
104
Closing WIP
9
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