Question

Book Scribners Corporation produces fine papers in three production departments --Puiping, 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 2,700 ses Work in process inventory, March 7,500 100% 705 Pulping cost in work in process inventory, March 1 Conversion cost in work in process inventory, March 1 594 Units transferred to the next production department 142,200 Pulping cost added during March $ 61,794 Conversion cost added during March $ 37,743 Print 100% srences $ $ 1.se 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.

Answer 1

1 Pulping 149,700 Conversion 147,450 Equivalent units of Production 2 Pulping Conversion $ 0.42 $ 0.26 Cost per Equivalent unit 3 Cost of Ending Work in process Pulping Conversion $ 3,150 $ 1,365 $ Total 4,515 4 Pulping Conversion Cost of units completed and transferred out $ 59,724 $ 36,972 $ Total 96,696 5 Drying Department Cost Reconcilation Costs to be accounted for: Cost of beginning WIP $ 1,674 Cost added to production during the period $ 99,537 Total Cost to be accounted for: $ 101,211 Costs accounted for as follows: Transferred out $ 96,696 Ending Work in Process $ 4,515 Total Cost accounted for: $ 101,211

Workings:

Weighted-Average Method: 1 Equivalent units of production Transferred Out Ending Work in process Total Equivalent units of Production Units 142,200 7,500 149,700 % of Pulping 100% 100% Pulping 142,200 7,500 149,700 %Conversion 100% 70% Conversion 142,200 5,250 147,450 2 Cost per Equivalent unit of production Beginning Work in process Cost added during the period Total Costs Div, Equivalent units Cost per Equivalent unit of production $ $ $ Pulping 1,080 61,794 62,874 149,700 0.42 Conversion $ 594 $ 37,743 $ 38,337 147,450 $ 0.26 $0.68 Costs EUP Costs EUP $ 3 Total costs accounted for: Cost of units transferred out: Pulping Conversion cost EUP Cost per EUP Total costs 142,200 $ 0.42 $ 59,724 142,200 $ 0.26 $ 36,972 $ 96,696 4 Cost of Ending WIP: Pulping Conversion cost EUP Cost per EUP Total costs 7,500 $ 0.42 $ 3,150 5,250 $ 0.26 $ 1,365 $ $ 4,515 101,211 Total costs accounted for

**Weighted-Average Method:
*It calculates the equiavlent-unit cost of the work done to date and assigns this cost to equiavlent units
completed and transferred out of the process and to equivalent units in ending WIP inventory.
*The weighted-average cost is the total of all costs entering WIP account divided by total equivalent units
of work done to date.
*Equivalent units in Beginning WIP + Equivalent units of work done in current period = Equivalent units completed and transferred out in current period + Equivalent units in Ending WIP.
*Cost per Equivalent unit of production = Cost of beginning WIP + Started = Total Costs divided by Equivalent units.

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