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	10	100	%	60	%	50	%
Work in process inventory, September 30	10	100	%	20	%	10	%

	Mixing		Materials		Conversion
Work in process inventory, September 1	$	20,040	$	80	$	4,680
Cost added during September	$	157,560	$	13,736	$	118,860

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, 86 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

		Mixing	Material	Conversion	Total
1)	Equivalent Units	96.00	88.00	87.00
2)	Cost per equivalnet unit	1850.00	157.00	1420.00
3)	Cost of Ending WIP	18,500	314	1,420	20,234
4)	Cost of Transferred Units	159,100	13,502	122,120	294,722
5)	Cost Reconciliation Report
	Costs to be acounted for:
		Total	Mixing	Material	Conversion
	Costs in beginning inventory	24,800	20,040	80	4,680
	Cost added dueing the year	290,156	157,560	13,736	118,860
	Total cost to account for	314,956	177,600	13,816	123,540
		Total	Mixing	Material	Conversion
	Cost Accounted for
	Units completed and transfer	294,722	159,100	13,502	122,120
	Units in ending inventory	20,234	18,500	314	1,420
	Total Cost Accounted for	314,956	177,600	13,816	123,540
	Note 1:
	Old Country Inc.
	Production Cost Report
		Actual Units
	Caluclation of Physical UNITS:
	Units in begining inventory	10
	Units started during the period	86
	Units to be accounted for	96
		Actual Units	Equivalent Units
			Mixing	Material	Conversion
	Units Completed and Transferred	86	86	86	86
	Units in ending inventory	10	10	2	1
	Equivalent Units	96	96	88	87
	Note 2:
		Total	Mixing	Material	Conversion
	Costs in beginning inventory	24,800	20,040	80	4,680
	Cost added dueing the year	290,156	157,560	13,736	118,860
	Total cost to account for	314,956	177,600	13,816	123,540
	Equivalent Units from above		96.0	88.0	87.0
	Cost per equivalnet unit		1850.00	157.00	1420.00