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

6

100%

60%

50%

Work in process inventory, September 30

6

100%

20%

10%

Mixing

Materials

Conversion

Work in process inventory, September 1

$

13,404

$

30

$

2,964

Cost added during September

$

201,726

$

14,592

$

136,612

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 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. (Do not round your intermediate calculations.)

  

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department in September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

  

4.	Prepare a cost reconciliation report for the Casing and Curing Department for September. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar.)

  

Answer 1

Production report using weight Average Method 1. Equivalent units for Material and Conversion cost Equivalent Unit Conversion Cost Physical units Mixing Material Units to be accounted for:- Units Completed & transferred out Ending work in Process Total Units 95 6 95 1.21 95 (Given) 0.6 95.6 101 101 96.2 Ending WIP = Units in ending WIP X Percentage complete 6 x 100% 6 x 20% 6 x 10% 2. Cost Per Equivalent Unit Mixing Material Conversion Cost Total cost Cost To be accounted For:- Beginning work in process Cost added during month Total Cost 13,404 $ 201,726 $ 215,130$ 30 14,592 14,622 $ $ $ 2,964 $ 136,612 $ 139,576 $ 16,398 (Given) 352,930 (Given) 369,328 (A) $ Equivalent Units Cost per unit 101 2,130.00 $ $ 96.20 152.00 95.60 1,460.00 (A)/(B) $ $ 3,742.00 3.Cost of Ending WIP and Goods Transferred out $ $ $ 202,350.00 14,439.60 138,700.00 (95 units x $ 2130) (95 units x $ 152) (95 units x $ 1460) 355,490 Units Completed & Transferred out:- Mixing Material Conversion Cost Total Cost of units completed & Transferred out Ending work in process :- Mixing Material Conversion Cost Total Cost of Ending Work in Process $ $ $ 12,780.00 182.40 876.00 (6 units x $ 2130) (1.20 units x $ 152) (0.60 units x $ 1460) $ 13,838 4.Cost Reconcilliation report Total cost $ $ $ 16,398.00 calculated in step 2 352,930.00 calculated in step 2 369,328 Cost accounted for:- Cost of beginning work in process cost added to production during the period Total cost to be accounted for Cost accounted for :- Cost of Units Completed & Transferred out Cost of Ending work in process Total cost to be accounted for $ $ $ 355,489.60 calculated in step 3 13,838.40 calculated in step 3 369,328