Question

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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 3,100 7,200 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 1008 809 1008 75% $ 1,054 $ 496 138.100 $ 51,254 $ 28, 204 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. 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.

Answer 1

Units to account for		Units to be accounted for
Beginning work in process	3100	units started and completed	138100
Add units started in process	142200	ending work in process	7200
Total units accounts for	145300	total units to be accounted for	145300

1) compute equivalent unit of production

	Material		Conversion
	%completion	units	%completion	UNITS
Units started and completed	100%	138100	100%	138100
Ending work in process	100%	7200	75%	5400
total equivalent units of production		145300		143500

2) compute cost per equivalent unit

	Material	conversion
Beginning work in process	$1054	$496
Cost added during March	$51254	$28204
Total cost account for	$52308	$28700
Equivalent units	145300	143500
Cost PER equivalent units[total cost/equivalent units]	$52308/145300	$28700/143500
	0.36 ​​​​	​​​​0.2

3) cost of ending work in process

	Units	cost per equivalent units	total
Material	7200	0.36	$2592(7200×$0.36)
Conversion	5400	0.2	$1080(5400×0.2)

TOTAL = $2592+$1080= $3672

4) compute cost of units transferred

	Units	cost per equivalent unit	total
Material	138100	0.36	$49716(138100×0.36)
Conversion	138100	0.2	$27620(138100×0.2)

5) cost reconciliation

Cost to be accounted for
Cost of beginning work in process	$1550
Add cost during the year	$79458
Total	$81008
Cost accounted for
Cost of units transferred out	$77336
Add cost of ending work in process	$3672
Total	$81008

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