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	3	100	%	60	%	50	%
Work in process inventory, September 30	3	100	%	20	%	10	%

	Mixing		Materials		Conversion
Work in process inventory, September 1	$	6,609	$	24	$	291
Cost added during September	$	236,041	$	24,748	$	122,116

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, 112 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

Costs Charged to Production
Costs of Beginning WIP	6,924
Costs incurred this period	382,905
Total Costs to account for	389,829
Total costs accounted for	389,829
Difference due to rounding cost/unit	-
Unit Reconciliation
Units to account for:
Beginning WIP	3
Started into Production (115 - 3)	112
Total units to account for	115
Total units accounted for
Completed during the period	112
Ending WIP	3
Total units accounted for	115
Equivalent Units of Production (EUP) - Weighted Average Method
	Units	% Mixing	EUP-Mixing	% Material	EUP-Materials	% Conversion	EUP-Conversion
Completed during the period	112	100%	112.00	100%	112.00	100%	112.00
Ending WIP	3	100%	3.00	20%	0.60	10%	0.30
Equivalent Units of Production (EUP)			115.00		112.60		112.30
Cost per EUP			Mixing		Materials		Conversion
Beginning WIP			6,609		24		291
Cost Incurred during the period			236,041		24,748		122,116
Total Costs		Costs	242,650	Costs	24,772	Costs	122,407
Equivalent Units of Production (EUP)		EUP	115.00	EUP	112.60	EUP	112.30
Cost per Equivalent Units of Production			2,110.00		220.00		1,090.00
Cost Assignment and Reconciliation
Costs Transferred Out	EUP	Cost per EUP	Total Cost
Mixing	112.00	2,110.00	236,320.00
Direct Materials	112.00	220.00	24,640.00
Conversion	112.00	1,090.00	122,080.00
Total transferred Out			383,040.00
Costs of Ending WIP	EUP	Cost per EUP	Total Cost
Mixing	3.00	2,110.00	6,330.00
Direct Materials	0.60	220.00	132.00
Conversion	0.30	1,090.00	327.00
Total Ending WIP			6,789.00
Total costs accounted for				389,829.00
Answer 1.
	Mixing	Material	Conversion
Equivalent Units	115.00	112.60	112.30
Answer 2.
	Mixing	Material	Conversion
Cost per Equivalent Units	2,110.00	220.00	1,090.00
Answer 3.
	Mixing	Material	Conversion	Total
Cost of Ending WIP	6,330.00	132.00	327.00	6,789.00
Answer 4.
	Mixing	Material	Conversion	Total
Cost of Units Transferred - Packaging Deptt.	236,320.00	24,640.00	122,080.00	383,040.00
Answer 5.
Costs Charged to Production
Costs of Beginning WIP	6,924
Costs incurred this period	382,905
Total Costs to account for	389,829
Total costs accounted for	389,829
Difference due to rounding cost/unit	-