Question

Problem 5-13 Comprehensive Problem; Second Production Department-Weighted-Average Method [LO5-2, LO5-3, LO5-4, LO5-5]

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

	Mixing		Materials		Conversion
Work in process inventory, September 1	$	27,200	$	90	$	4,880
Cost added during September	$	409,700	$	35,550	$	225,350

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, 160 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	160	160	160
Work in process, ending	10	2	1
Equivalent units of production	170	162	161
2
	Mixing	Materials	Conversion
Work in process, September 1	27200	90	4880
Cost added during September	409700	35550	225350
Total costs	436900	35640	230230
Divide by Equivalent units of production	170	162	161
Cost per Equivalent unit	2570	220	1430
3
	Mixing	Materials	Conversion	Total
Work in process, ending units	10	2	1
X Cost per Equivalent unit	2570	220	1430
Cost of ending work in process inventory	25700	440	1430	27570
4
	Mixing	Materials	Conversion	Total
Units completed and transferred out	160	160	160
X Cost per Equivalent unit	2570	220	1430
Cost of Units completed and transferred out	411200	35200	228800	675200
5
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	32170
Cost added to production during September	670600
Total Cost to be accounted for	702770
Cost accounted for as follows:
Cost of Units completed and transferred out	675200
Cost of ending work in process inventory	27570
Total Cost accounted for	702770