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 4,100 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% B 100% 75% $ 1,517 $ 779 140,300 $ 56,320 $ 32,870 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

1.

	Pulping	Conversion
Units completed and transferred out	140,300	140,300
Work in process,ending:
8000 * 100%	8,000
8000 * 75%		6,000
Equivalent units of production	148,300	146,300

2.

	Pulping	Conversion
Work in process,March 1	$1,517	$779
Cost added during the march	$56,320	$32,870
Total costs	$57,837	$33,649
Divided by equivalent units of production	148,300	146,300
Cost per equivalent unit	0.39	0.23

3.

	Pulping	Conversion	Total
Work in process,ending units	8,000	6,000
Cost per equivalent unit	0.39	0.23
Cost of ending work in process inventory	$3,120	$1,380	$4,500

4.

	Pulping	Conversion	Total
Units completed and transferred out	140,300	140,300
Cost per equivalent unit	0.39	0.23
Cost of units completed and transferred out	$54,717	$32,269	$86,986

5.

Cost reconciliation:
Cost to be accounted for:
Cost of beginning work in process inventory	$2,296
Cost added to production during month	$89,190
Total cost to be accounted for	$91,486
Cost accounted as follows:
Cost of units completed and transferred out	$86,986
Cost of ending work in process inventory	$4,500
Total cost accounted for	$91,486