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: Work in process inventory, March 1 Work in process inventory, March 31 Percent Completed Units Pulping Conversion 4,000 100% 80% 75% 8,000 100% $ 2,860 $ 800 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 142,400 $108,436 $ 34,816

Answer 1

Requirement 1

	Pulping	Conversion
Equivalent Units of Production	1,50,400	1,48,400

Requirement 2

	Pulping	Conversion
Cost per equivalent Unit	$                    0.74	$                   0.24

Requirement 3

	Total
Ending Inventory	$ 7,360
Units Completed and transferred	$ 139,552

Requirement 4

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$ 3,660
Cost incurred during period	$ 143,252
Total cost to be accounted for	$ 146,912
Costs accounted for as follows:
Cost of Units Transferred Out	$ 139,552
Cost of Ending Wip	$ 7,360
Total cost accounted for	$ 146,912

Working

Reconciliation of Units
A	Opening WIP	4,000
B	Introduced	1,46,400
C=A+B	TOTAL	1,50,400
D	Transferred	1,42,400
E=C-D	Closing WIP	8,000

.

Statement of Equivalent Units(Weighted average)
				Pulping		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	1,42,400			100%	1,42,400	100%	1,42,400
Closing WIP	8,000			100%	8,000	75%	6,000
Total	1,50,400			Total	1,50,400	Total	1,48,400

.

Cost per Equivalent Units (Weighted average)
COST		Pulping	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 2,860	$ 800	$ 3,660
Cost incurred during period		$ 108,436	$ 34,816	$ 143,252
Total Cost to be accounted for		$ 111,296	$ 35,616	$ 146,912
Total Equivalent Units		1,50,400	1,48,400
Cost per Equivalent Units		$                   0.74	$                     0.24	$                0.98

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Pulping	$ 0.74	8,000	$             5,920.00	1,42,400	$ 105,376
Conversion cost	$ 0.24	6,000	$             1,440.00	1,42,400	$          34,176.00
TOTAL	$ 146,912	TOTAL	$ 7,360	TOTAL	$ 139,552