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 Work in process inventory, September 30 100 % 100 % 60 % 20 % 50 % 10% Mixing Materials Conversion Work in process inventory, September 1 Cost added during September $ 19,323 $ 459 6,111 229,427 21,923 189,112 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, 116 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 5. Prepare a cost reconciliation report for the Casing and Curing Department for September

Explanation / Answer

1 Mixing Materials Conversion Transferred to next department 116 116 116 Work in process, ending 9 1.8 0.9 Equivalent units 125 117.8 116.9 2 Mixing Materials Conversion Total costs 248750 22382 195223 Equivalent units 125 117.8 116.9 Costs per equivalent unit 1990 190 1670 3 Cost of ending work in process inventory: Mixing 17910 =9*1990 Materials 342 =1.8*190 Conversion 1503 =0.9*1670 Total 19755 4 Cost of units completed and transferred out Mixing 230840 =116*1990 Materials 22040 =116*190 Conversion 193720 =116*1670 Total 446600 5 Costs to be accounted for: Work in process, beginning September 1 25893 Cost added during the month. 440462 Total Costs to be accounted for 466355 Cost accounted for as follows: Transferred out 446600 Work in process, ending September 30 19755 Total Cost accounted for 466355

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