# Answered Essay: Old Country Links Inc. produces sausages in three production departments—Mixing, Casing a

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:

units mixing materials conversion

 Work in process inventory, September 1 6 100% 60% 50% Work in process inventory, September 30 6 100% 20% 10%

mixing material conversion

 Work in process inventory, September 1 \$ 8,874 \$ 366 \$ 1,056 Cost added during September \$ 189,846 \$ 24,412 \$ 154,176
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, 138 batches (i.e., units) were completed and transferred to the Packaging Department.

1a. Determine the equivalent units for September for mixing, materials, and conversion. (Round your answers to 1 decimal place.)

 ——————————————— mixing material conversion equivalents units of production

2a. Compute the costs per equivalent unit for September for mixing, materials, and conversion. (Round your intermediate calculations to 1 decimal place. Round your final answers to the nearest whole dollar.)

 —————- mixing material conversion cost equivalent per unit

3a.Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department in September. (Round your intermediate calculations to 1 decimal place. Round your answers to the nearest whole dollar.)

 ——– total cost of ending work in process investory cost of units transferred out

4a. Prepare a cost reconciliation report for the Casing and Curing Department for September. (Round your final answers to the nearest whole dollar.)

cost to be ccounted for:

cost accounted for s follows:

 Answer 1 – 4. Weighted Average Method Particulars Equivalent Units Physical Units Mixing Materials Conversion Costs Units to be accounted for Work in process – Beginning 6.0 Started into production 138.0 Total units 144.0 Units accounted for Transferred out 138.0 138.0 138.0 138.0 Work in process, Ending 6.0 6.0 1.2 0.6 (100% – Mixing, 20% – materials, 10% conversion costs) Equivalent units accounted for 144.0 144.0 139.2 138.6 Costs Unit costs Mixing Materials Conversion Total WIP, Beginning 8,874.0 366.0 1,056.0 10,296.0 Costs incurred in September 189,846.0 24,412.0 154,176.0 368,434.0 Total Costs 198,720.0 24,778.0 155,232.0 378,730.0 Equivalent units 144.0 139.2 138.6 Costs per Equivalent Units 1,380.0 178.0 1,120.0 2,678.0 Cost Assignment Materials Conversion Total Good Units completed & Transferred out (138 Units) 190,440.0 24,564.4 154,560.0 369,564.4 Total Cost of goods completed & Transferred out 190,440.0 24,564.4 154,560.0 369,564.4 Work in Process – ending Inventory 8,280.0 213.6 672.0 9,165.6 Total Cost accounted for 198,720.0 24,778.0 155,232.0 378,730.0 Costs to be accounted for Work in process, Beginning 10,296.0 Started into production 368,434.0 Total costs 378,730.0 Cost Reconciliation Schedule Costs accounted for Transferred out 369,564.4 Work in process, Ending Mixing 8,280.0 Materials 213.6 Conversion costs 672.0 9,165.6 Total costs 378,730.0
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