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	1	50%	50%	50%
Work in process inventory, September 30	1	80%	80%	80%

	Mixing	Materials	Conversion
Work in process inventory, September 1	$3,190	$ 270	$ 645
Cost added during September	$100,016	$7,146	$58,065

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, 61 batches (i.e., units) were completed and transferred to the Packaging Department.

Requirement 1:

Determine the equivalent units for September for mixing, materials, and conversion. (Round your answers to 1 decimal place.)

	Mixing	Materials	Conversion
Equivalent units of production

Requirement 2:

Compute the costs per equivalent unit for September for mixing, materials, and conversion. (Omit the "$" sign in your response.)

	Mixing	Materials	Conversion
Cost per equivalent unit	$	$	$

Requirement 3:
(a)	Determine the total cost of ending work in process inventory. (Omit the "$" sign in your response.)

	Mixing	Materials	Conversion	Total
Cost of ending work in process inventory	$	$	$	$

(b)	Determine the total cost of units transferred to the Packaging Department in September. (Omit the "$" sign in your response.)

	Mixing	Materials	Conversion	Total
Cost of units transferred out	$	$	$	$

Answer 1

Equivalent units of Production = Units completed and transferred + Ending WIP x Completion
Mixing = 61 + 1 x 80% = 61.80 units
Materials = 61 + 1 x 80% = 61.80 units
Conversion = 61 + 1 x 80% = 61.80 units

Cost per unit = (Beginning Cost + Cost added) / Equivalent units
Mixing = ($3190+100016)/61.80 = $1670 per unit
Materials = ($270+7146)/61.80 = $120 per unit
Conversion = ($645+58065)/61.80 = $950 per unit

a)
Cost of ending WIP
Mixing = 1 x 80% x $1670 = $1336
Material = 1 x 80% x $120 = $96
Conversion = 1 x 80% x $950 = $760
Total Cost = $2192

b)
Cost of units transferred out
Mixing = 61 x $1670 = $101870
Material = 61 x $120 = $7320
Conversion = 61 x $950 = $57950
Total Cost = $167140