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	4	100	%	60	%	50	%
Work in process inventory, September 30	4	100	%	20	%	10	%

	Mixing		Materials		Conversion
Work in process inventory, September 1	$	7,036	$	176	$	2,384
Cost added during September	$	143,844	$	18,472	$	136,404

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, 88 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

1
	Mixing	Materials	Conversion
Units completed and transferred out	88	88	88
Work in process, ending	4	0.8	0.4
Equivalent units of production	92.0	88.8	88.4
2
	Mixing	Materials	Conversion
Work in process, September 1	7036	176	2384
Cost added during September	143844	18472	136404
Total costs	150880	18648	138788
Divide by Equivalent units of production	92.0	88.8	88.4
Cost per Equivalent unit	1640	210	1570
3
	Mixing	Materials	Conversion	Total
Work in process, ending units	4	0.8	0.4
X Cost per Equivalent unit	1640	210	1570
Cost of ending work in process inventory	6560	168	628	7356
4
	Mixing	Materials	Conversion	Total
Units completed and transferred out	88	88	88
X Cost per Equivalent unit	1640	210	1570
Cost of Units completed and transferred out	144320	18480	138160	300960
5
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	9596
Cost added to production during September	298720
Total Cost to be accounted for	308316
Cost accounted for as follows:
Cost of Units completed and transferred out	300960
Cost of ending work in process inventory	7356
Total Cost accounted for	308316