Question

PLEASE HELP!

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 Mixing Materials Conversion 100 % 60% 50 % 100 % 20% 10% Units 10 10 Work in process inventory, September 1 Work in process inventory, September 30 Work in process inventory, September 1 Cost added during September Mixing $ 27,200 $ 409,700 Materials Conversion $ 90 $ 4,880 $ 35,550 $ 225, 350 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, 160 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.

Answer 1

Solution

	Mixing	Material	Conversion
Equivalent Units of Production	170.0	162.0	161.0

.

	Mixing	Material	Conversion
Cost per equivalent Unit	$          2,570.000	$       220.000	$          1,430.000

.

	Mixing	Material	Conversion cost
Ending Inventory	$ 25,700	$ 440	$ 1,430

.

	Mixing	Material	Conversion cost
Units Completed and transferred	$ 411,200	$ 35,200	$ 228,800

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 32,170
Cost transferred in	$ 409,700
Cost incurred during period	$ 260,900
Total cost to be accounted for	$ 702,770
Costs accounted for as follows:
Cost of Units Transferred Out	$ 675,200
Cost of Ending Wip	$ 27,570
Total cost accounted for	$ 702,770

Working

Statement of Equivalent Units(Weighted average)
		Mixing		Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	160	100%	160	100%	160.0	100%	160
Closing WIP	10	100%	10	20%	2.0	10%	1.00
Total	170		170	Total	162.0	Total	161

.

Cost per Equivalent Units (Weighted average)
COST	Mixing	Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost	$          27,200.00	$ 90	$ 4,880	$ 32,170
Cost incurred during period	$       409,700.00	$ 35,550	$ 225,350	$ 670,600
Total Cost to be accounted for	$ 436,900	$ 35,640	$ 230,230	$ 702,770
Total Equivalent Units	170.0	162.0	161.0
Cost per Equivalent Units	$          2,570.000	$       220.000	$          1,430.000

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Mixing	$            2,570.00	10	$          25,700.00	160	$ 411,200
Material	$ 220.00	2	$                440.00	160	$ 35,200
Conversion cost	$ 1,430.00	1	$             1,430.00	160	$ 228,800
TOTAL	$ 702,770	TOTAL	$ 27,570	TOTAL	$ 675,200