60.1K

Verified Solution

Link Copied!

Chapter 4 1 of 3

Old Country Links Inc. produces sausages in three production departmentsMixing, 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	1	100%	90%	80%
Work in process inventory, September 30	1	100%	80%	70%

	Mixing		Materials		Conversion
Work in process inventory, September 1	$	1,670	$	90	$	605
Cost added during September	$	81,460	$	6,006	$	42,490

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, 50 batches (i.e., units) were completed and transferred to the Packaging Department.

Required:

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

Mixing Materials Conversion

Equivalent units of production 51.0

2.	Compute the costs per equivalent unit for September for mixing, materials, and conversion.

Mixing Materials Conversion

Equivalent units of production

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the Packaging Department in September.

Total

Cost of ending work in process inventory

Cost of units transferred out

4. Prepare a cost reconciliation report for the Casing and Curing Department for September. (Round your intermediate calculations to 1 decimal place.)

Casting and Curing Department

Cost Reconciliation

costed to be accounted for:

Total cost to be accounted for $0

cost account for as follows:

Total cost account for $0

--------------------------------------------------------------------------------------------------------------------------------

Sunspot Beverages, Ltd., of Fiji 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	20,000	100	%	75	%
Started into production	180,000
Completed and transferred out	160,000
Work in process, ending	40,000	100	%	25	%

	Materials		Conversion
Work in process, beginning	$	25,200	$	24,800
Cost added during June	$	334,800	$	238,700

Assume that the company uses the FIFO method rather than the weighted-average method in its process costing system.

Required:
1.	Determine the equivalent units for June for the Blending Department.

Materials Conversion

Equivalent units of production

2.	Compute the costs per equivalent unit for June for the Blending Department. (Round your answers to 2 decimal places.)

Materials Conversion

Cost per Equivalent unit

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the next process for the Blending Department in June.

Total Cost of ending work in process inventory

Cost of units transferred out

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

Baking Department

Cost Reconciliation

Costs to be accounted for:

Total cost to be accounted for $0

Costs accounted for as follows:

Total cost accounted for $0

------------------------------------------------------------------------------------------------------------------------------------------

Chapter 3

Woodbury Hospital has three service departments and three operating departments. Estimated cost and operating data for all departments in the hospital for the forthcoming quarter are presented in the table below:

	Service Departments									Operating Departments
	Housekeeping Services			Food Services			Administrative Services			Laboratory			Radiology			General Hospital			Total
Variable costs	$	0		$	193,860		$	158,840		$	243,600		$	304,800		$	74,500		$	975,600
Fixed costs		87,000			107,200			90,180			162,300			215,700			401,300			1,063,680
Total cost	$	87,000		$	301,060		$	249,020		$	405,900		$	520,500		$	475,800		$	2,039,280
Meals served								800			2,000			1,000			68,000			71,800
Percentage of peak-period needsFood Services								0.8	%		2.4	%		1.6	%		95.2	%		100	%
Square feet of space		5,000			13,000			6,500			10,000			7,500			108,000			150,000
Files processed											14,000			7,000			25,000			46,000
Percentage of peak-period needsAdministrative Services											30	%		20	%		50	%		100	%

The costs of the service departments are allocated by the step-down method using the allocation bases and in the order shown in the following table:

Service Department	Costs Incurred	Allocation Bases
Housekeeping Services	Fixed	Square feet of space
Food Services	Variable	Meals served
	Fixed	Peak-period needsFood Services
Administrative Services	Variable	Files processed
	Fixed	Peak-period needsAdministrative Services

All billing in the hospital is done through Laboratory, Radiology, or General Hospital. The hospitals administrator wants the costs of the three service departments allocated to these three billing centers.

Required:

Using the step-down method, prepare the cost allocation desired by the hospital administrator. Include under each billing center the direct costs of the center, as well as the costs allocated from the service departments. (Please enter allocations from a department as negative and allocations to a department as positive. The line should add across to zero. Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

	Housekeeping Services Food Services Administrative Services Laboratory Radiology General Hospital Variable costs $0 Food services allocation Administrative services allocation Total variable costs $0 $0 $0 $0 $0 $0 Fixed costs Housekeeping services allocation Food services allocation Administrative services allocation Total fixed costs $0 $0 $0 $0 $0 $0 Total overhead costs $0 $0 $0 $0 $0 $0

Answer & Explanation Solved by verified expert

See Answer