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:

		Percent Completed
	Units	Pulping				Conversion
Work in process inventory, March 1	3,200	100	%			80	%
Work in process inventory, March 31	8,000	100	%			75	%
Pulping cost in work in process inventory, March 1				$	1,584
Conversion cost in work in process inventory, March 1				$	1,024
Units transferred to the next production department					152,000
Pulping cost added during March				$	81,616
Conversion cost added during March				$	55,856

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 wet fibers produces a set amount of dried paper that is passed on to the Finishing Department.

Required:
1.	Determine the equivalent units for March for pulping and conversion.

  

              

2.	Compute the costs per equivalent unit for March for pulping and conversion. (Round your answers to 2 decimal places.)

  

     

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the Finishing Department in March. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar.)

  

  

4.	Prepare a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar.)

  

Answer 1

1) Equivalent unit

	Physical unit	EUP-Material	EUP-Conversion
Unit transferred out	152000	152000	152000
Ending WIP	8000	8000	8000*75% = 6000
Equivalent unit		160000	158000

2) Cost per equivalent unit

	Material	Conversion
Beginning WIP	1584	1024
Cost added	81616	55856
Total	83200	56880
Equivalent unit	160000	158000
Cost per equivalent unit	0.52	0.36

3) Cost of ending work in process

	Direct material	Conversion	Total
Cost of ending work in process	8000*.52 = 4160	6000*.36 = 2160	6320

Cost of unit transferred out

	Direct material	Conversion	Total
Cost of unit transferred out	79040	54720	133760

4) Cost reconciliation

Cost to be accounted for
Beginning WIP	2608
Cost added	137472
Total cost to be accounted for	140080
Cost accounted as
Cost of unit transferred out	133760
Cost of ending WIP	6320
Total Cost accounted as	140080