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 Percent Completed Units Mixing Materials Conversion Work in process inventory, September 1 11 Work in process inventory, September 30 11 100 % 100 % 60% 20% 50% 10% Mixing Materials Conversion $ 20,471$363$ 2,178 $125,729 10,915 87,191 Work in process inventory, September Cost added during September 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, 74 batches (i.e., units) were completed and transferred to the Packaging Department.

Explanation / Answer

Answer 1 Calculation of equivalent units of production for Mixing,materials and conversion for the month of September Physical Units % of Completion for Mixing Equivalent units for Mixing % of Completion for Materials Equivalent units for Materials % of Completion for Conversion Equivalent units for Conversion Units completed and transferred 74 100% 74 100% 74 100% 74 Ending work in process , Sep.30 11 100% 11 20% 2.2 10% 1.1 Equivalent Units of Production 85 76.2 75.1 Answer 2 Cost per equivalent unit for Mixing,materials and conversion for the month of September Mixing Materials Conversion Work in process Inventory , Sep.1 $20,471.00 $363.00 $2,178.00 Cost added during the month $125,729.00 $10,915.00 $87,191.00 Cost to account for $146,200.00 $11,278.00 $89,369.00 / Equivalent units of production 85 76.2 75.1 Cost per equivalent unit   $1,720.00 $148.01 $1,190.00 Answer 3 Computation of Cost of ending work in process inventory for Mixing,materials and conversion for the month of September Mixing Materials Conversion Total Ending work in process - 11 units * $1720 $18,920.00 $18,920.00 - 2.2 units * $148.01 $325.61 $325.61 - 1.1 units * $1190 $1,309.00 $1,309.00 Cost of ending work in process Inventory    $20,554.61 Answer 4 Computation of cost of units transferred out Mixing Materials Conversion Total Cost of units transferred out - 74 units * $1720 $127,280.00 $127,280.00 - 74 units * $148.01 $10,952.39 $10,952.39 - 74 units * $1190 $88,060.00 $88,060.00 Cost of units transferred out $226,292.39 Answer 5 Cost reconciliation report for Casing and Curing Department for September Cost to account for Mixing Materials Conversion Total Work in process Inventory , Sep.1 $20,471.00 $363.00 $2,178.00 $23,012.00 Cost added during the month $125,729.00 $10,915.00 $87,191.00 $223,835.00 Cost to account for $146,200.00 $11,278.00 $89,369.00 $246,847.00 Cost accounted For Cost of ending work in process $20,554.61 Cost of units transferred out $226,292.39 Cost accounted For $246,847.00

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