Question

Problem 4-13 Comprehensive Problem; Second Production Department-Weighted-Average Method [LO4-2, LO4-3, LO4-4, LO4-5]

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	$	7,244	$	28	$	3,140
Cost added during September	$	221,546	$	22,718	$	226,308

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, 133 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

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				4.00
Add: Units Started in Process				133.00
Total Units to account for:				137.00
UNITS TO BE ACCOUNTED FOR:
Units started and completed				133.00
Ending Work in Process				4.00
Total Units to be accounted for:				137.00
Equivalent Units:
			Transferred in Cost		Material Cost		Conversion Cost
			% Completion	Units	% Completion	Units	% Completion	Units
Units started annd completed			100%	133.00	100%	133.00	100%	133.00
Ending Work in Process			100%	4.00	20%	0.80	10%	0.40
Total Equivalent units				137.00		133.80		133.40
TOTAL COST TO ACCOUNT FOR:
			Transferred-in		Material		Conversion
Beginning work in Process			7,244		28		3,140
Cost Added during May			221,546		22,718		226,308
Total Cost to account for:			228,790		22,746		229,448
Total Cost to account for:							480,984
COST PER EQUIVALENT UNIT:
			Transferred-in		Material		Conversion
Cost added during the period			228,790		22,746		229,448
Equivalent Units			137.00		133.80		133.40
Cost per Equivalent unit			1670.00		170.00		1720.00
TOTAL COST ACCOUNTED FOR:
Units started and Completed and Transferred out (133 units)
			Equivalent unit	Cost per EU	Total Cost
Transferred-in cost			133	1670	222110
Material cost			133	170	22610
Conversion Cost			133	1720	228760
Total Cost of Units completed and transferred out:					473480
Ending Work in Process (4 units)
			Equivalent unit		Total Cost
Transferred-in cost			4.00	1670	6680
Material cost			0.80	170	136
Conversion Cost			0.40	1720	688
Total cost of Ending Work in process:					7,504
Total Cost accounted for:					480,984
Req 1:
Equivalent units
Mixing: 137 units
Material: 133.80 units
Conversion: 133.40 units
Req2:
Cost per equivalent unit:
Mixing: 1670 per unit
Material: 170 per unit
Conversion: 1720 per unit
Req 3: Ending WIP balance is $ 7504
			Equivalent unit		Total Cost
Transferred-in cost			4.00	1670	6680
Material cost			0.80	170	136
Conversion Cost			0.40	1720	688
Total cost of Ending Work in process:					7,504
Req 4:
Cost of units completed is $ 473480
			Equivalent unit	Cost per EU	Total Cost
Transferred-in cost			133	1670	222110
Material cost			133	170	22610
Conversion Cost			133	1720	228760
Total Cost of Units completed and transferred out:					473480
Req 5:
Cost to account for:
Beginning WIP cost				10412
Aadd: Current cost added				470572
				480984
Cost accounted for:
Cost of units compelted				473480
Ending WIP				7504
				480984
Hence reconciled