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	3,300	100	%		80	%
Work in process inventory, March 31	7,500	100	%		80	%
Pulping cost in work in process inventory, March 1				$	1,155
Conversion cost in work in process inventory, March 1				$	561
Units transferred to the next production department					157,800
Pulping cost added during March				$	60,006
Conversion cost added during March				$	33,837

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. Compute the Drying Department's equivalent units of production for pulping and conversion in March..

	Pulping Conversion Equivalent units of production

2. Compute the Drying Department's cost per equivalent unit for pulping and conversion in March.

(Round your answers to 2 decimal places.)

	Pulping Conversion Cost per equivalent unit

3.

	3. Compute the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March. (Round your intermediate calculations to 2 decimal places.) Pulping Conversion Total Cost of units completed and transferred out

4. Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March. (Round your intermediate calculations to 2 decimal places.)

	Pulping Conversion Total Cost of ending work in process inventory

5. Prepare a cost reconciliation report for the Drying Department for March.

Prepare a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places.)

	Drying Department Cost Reconciliation Costs to be accounted for: Total cost to be accounted for Costs accounted for as follows: Total cost accounted for

Answer 1

1) Equivalent unit

	Pulping	Conversion
Unit completed out	157800	157800
Ending work in process	7500	7500*80% = 6000
Equivalent unit	165300	163800

2) Cost per equivalent unit

	Pulping	Conversion
Beginning WIP	1155	561
cost added	60006	33837
Total Cost	61161	34398
Equivalent unit	165300	163800
Cost per equivalent unit	0.37	0.21

3) Cost of ending work in process

	Pulping	Conversion	Total
Cost of ending WIP	2775	1260	4035

4) Cost of unit transferred out

	Pulping	Conversion	Total
Cost of unit transferred out	58386	33138	91524

figure a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places.)

	Drying Department Cost Reconciliation Costs to be accounted for: Beginning WIP 1716 Cost added 93843 Total cost to be accounted for 95559 Costs accounted for as follows: Cost of unit transferred out 91524 Cost of ending WIP 4035 Total cost accounted for 95559