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 2 100% 60% 50%

Work in process inventory, September 30 2 100% 20% 10%

Mixing Materials Conversion

Work in process inventory, September1 $5,104 $132 $1,086

Cost added during September $382,096 $33,449 $236,214

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, 158 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.

Question 2

Cooperative San Jos of southern Sonora state in Mexico makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavoring for drinks and for use in desserts. The bottles are sold 

for $12 each. The first stage in the production process is carried out in the Mixing Department, which removes foreign matter from the raw materials and mixes them in the proper proportions in large vats. The company uses the weighted-average method in its process costing system.

 

A hastily prepared report for the Mixing Department for April appears below:

Units to be accounted for:

Work in process, April 1 (materials 90% complete; conversion 80% complete) 6,900

Started into production 31,300

Total units to be accounted for 38,200

Units accounted for as follows:

Transferred to next department 29,800

Work in process, April 30 (materials 75% complete;

conversion 50% complete) 8,400

Total units accounted for 38,200

Cost Reconciliation

Cost to be accounted for:

Work in process, April 1 $28,428

Cost added during the month 132,211

Total cost to be accounted for $160,639

Cost accounted for as follows:Work in process, April 30 $25,347

Transferred to next department 135,292

Total cost accounted for $160,639

Management would like some additional information about Cooperative San Jos's operations.

Required:

1. What were the Mixing Department's equivalent units of production for materials and conversion for April?

2. What were the Mixing Department's cost per equivalent unit for materials and conversion for April? The beginning inventory consisted of the following costs: materials, $19,251; and conversion cost, $9,177. The costs added 

during the month consisted of: materials, $88,688; and conversion cost, $43,523.

 

3. How many of the units transferred out of the Mixing Department in April were started and completed during that month?

4. The manager of the Mixing Department stated, "Materials prices jumped from about $2.60 per unit in March to $3.10 per unit in April, but due to good cost control I was able to hold our materials cost to less than $3.10 per unit for the month." Should this manager be rewarded for good cost control?

Question 3

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending 

Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June.

 

Percent Completed

Units Materials Conversion

Work in process, beginning 78,000 70% 40%

Started into production 384,000

Completed and transferred out 374,000

Work in process, ending 88,000 75% 25%

Materials Conversion

Work in process, beginning $30,400 $10,800

Cost added during June $326,000 $230,760

Required:

1. Calculate the Blending Department's equivalent units of production for materials and conversion in June.

2. Calculate the Blending Department's cost per equivalent unit for materials and conversion in June.

3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June.

4. Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June.

5. Prepare a cost reconciliation report for the Blending Department for June.