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 Units 6 Percent Completed Mixing Materials Conversion 100 SOR 2013 10% COR Work in process Inventory, September 1 Work in process inventory, September 30 6 Work in process inventory, September 1 Cost added during September Mixing Haters Conversion $ 13,698 5 456 $ 5,860 $ 315,862 $ 31,622 $ 200,930 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 148 batches (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. whilst Next >

Answer 1

1) Equivalent unit

	Whole Unit	EUP-Material	EUP-Labor	EUP-Overhead
Unit transferred out	148	148	148	148
Ending WIP	6	6	1.2	0.60
Equivalent unit		154	149.20	148.60

2) Cost per equivalent unit

	Material	Labor	Overhead
Beginning WIP	13698	456	5868
Cost added	315862	31622	280930
Total Cost	329560	32078	286798
Equivalent unit	154	149.20	148.60
Cost per equivalent unit	2140	215	1930

3) Cost of ending WIP

	Material	Labor	Overhead	Total
Cost of ending WIP	6*2140 = 12840	1.2*215 = 258	1930*.60 = 1158	14256

4) Cost of unit transferred out

	Material	Labor	Overhead	total
Cost of unit transferred out	316720	31820	285640	634180

5) Cost reconciliation

Cost to be accounted for
Beginning WIP	20022
Cost added	628414
Total Cost to be accounted for	648436
Cost accounted as
Cost of unit transferred out	634180
Cost of ending WIP	14256
Total Cost accounted as	648436