Problem 4-13 Comprehensive Problem; Second Production Department-Weighted-Averag

Question

Problem 4-13 Comprehensive Problem; Second Production Department-Weighted-Average Method LO4-2, L04-3, 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 Work in process inventory September 30 100% 60 50 100 % 20 % 10 % Mixing Materials Conversion s 16,219 $49 S6, 629 Work in process inventory, September 1 Cost added during Septembe $151, 641 12,232 s 128, 40 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, 70 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 Departments cost per equivalent unit for mixing, materials, and conversion for the month of September a. Compute the Casing and Curing Departments 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

Explanation / Answer

1 Cost of Equivalent Production units Mixing Material Conversion Units moved to next department 70 70 70 add: Ending work in process: 7 Unit 100% Complete 7 7 Unit 20% Complete 1.4 7 Unit 10% Complete 0.7 Equivalent Units of production 77 71.4 70.7 2 Cost per equivalent Unit Mixing Material Conversion WIP Beginning 16219 49 6629 Cost added during Sept 151641 12232 128408 Total Cost 167860 12281 135037 Divided by:Equivalent units of production (part-1 77 71.4 70.7 Cost per equivalent Unit         2,180            172             1,910 3 Ending work in process Mixing Material Conversion Total a Equivalent units of production (part-1) 7 1.4 0.7 b Cost per equivalent unit (part-2)         2,180            172             1,910 Cost of ending wip a*b      15,260            241             1,337      16,838 4 Ending work in process Mixing Material Conversion Total a Units moved to next department 70 70 70 b Cost per equivalent unit (part-2)         2,180            172             1,910 Cost of ending wip a*b 1,52,600      12,040       1,33,700 2,98,340

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