Question

Scribners Corporation produces fine papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department, raw materials such as wood fiber and rag cotton are mechanically and chemically treated to separate their fibers. The result is a thick slurry of fibers. In the Drying Department, the wet fibers transferred from the Pulping Department are laid down on porous webs, pressed to remove excess liquid, and dried in ovens. In the Finishing Department, the dried paper is coated, cut, and spooled onto reels. The company uses the weighted average method in its process costing system. Data for March for the Drying Department follow: Units 5,000 8,000 Work in process inventory, March 1 Work in process inventory, March 31 Pulping cost in work in process inventory, March 1 Conversion cost in work in process inventory, March 1 Units transferred to the next production department Pulping cost added during March Conversion cost added during March Percent Completed Pulping Conversion 100% 20$ 100% 25% $ 4,800 $ 500 157,000 $ 102,450 $ 31,300 No materials are added in the Drying Department. Pulping cost represents the costs of the wet fibers transferred in from the Pulping Department. Wet fiber is processed in the Drying Department in batches; each unit in the above table is a batch and one batch of we fibers produces a set amount of dried paper that is passed on to the Finishing Department. Required: 1. Compute the Drying Department's equivalent units of production for pulping and conversion in March. 2. Compute the Drying Department's cost per equivalent unit for pulping and conversion in March. 3. Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March. 4. Compute the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March 5. Prepare a cost reconciliation report for the Drying Department for March Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the Drying Department's equivalent units of production for pulping and conversion in March. Pulping Conversion Equivalent units of production

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	165,000	159,000

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	Material	Conversion
Cost per equivalent Unit	$                    0.65	$                   0.20

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	Material	Conversion	Total
Ending Inventory	$ 5,200	$ 400	$ 5,600

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	Material	Conversion	Total
Units Completed and transferred	$ 102,050	$ 31,400	$ 133,450

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Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 5,300
Cost incurred during period	$ 133,750
Total cost to be accounted for	$ 139,050
Costs accounted for as follows:
Cost of Units Transferred Out	$ 133,450
Cost of Ending Wip	$ 5,600
Total cost accounted for	$ 139,050

Working

Reconciliation of Units
A	Beginning WIP	5,000
B	Introduced	160,000
C=A+B	TOTAL	165,000
D	Transferred out	157,000
E=C-D	Ending WIP	8,000

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Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	157,000			100%	157,000	100%	157,000
Ending WIP	8,000			100%	8,000	25%	2,000
Total	165,000			Total	165,000	Total	159,000

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Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 4,800	$ 500	$ 5,300
Cost incurred during period		$ 102,450	$ 31,300	$ 133,750
Total Cost to be accounted for		$ 107,250	$ 31,800	$ 139,050
Total Equivalent Units		165,000	159,000
Cost per Equivalent Units		$                   0.65	$                     0.20	$                0.85

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Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 0.65	8,000	$             5,200.00	157,000	$        102,050.00
Conversion cost	$ 0.20	2,000	$                400.00	157,000	$          31,400.00
TOTAL	$ 139,050	TOTAL	$ 5,600	TOTAL	$ 133,450