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	3,100	100	%		80	%
Work in process inventory, March 31	5,600	100	%		75	%
Pulping cost in work in process inventory, March 1				$	1,581
Conversion cost in work in process inventory, March 1				$	1,023
Units transferred to the next production department					157,100
Pulping cost added during March				$	84,650
Conversion cost added during March				$	58,658

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.

Complete this question by entering your answers in the tabs below.

• Required 1

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

	Pulping	Conversion
Equivalent units of production	?	?

Required2

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

Required3

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

Required4

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

Required5

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

Requirement 1

	Pulging	Conversion
Equivalent Units of Production	1,62,700	1,61,300

Requirement 2

	Pulging	Conversion
Cost per equivalent Unit	$                    0.53	$              0.37

Requirement 3 and 4

	Pulging	Conversion	Total
Cost of ending work in process inventory	$                  2,968	$            1,554	$           4,522
Cost of units completed and transferred out	$                83,263	$         58,127	$     1,41,390

Requirement 5

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost	$        2,604.00
Cost incurred during period	$    1,43,308.00
Total cost to be accounted for	$    1,45,912.00
Costs accounted for as follows:
Cost of Units Transferred Out	$    1,41,390.00
Cost of Ending Wip	$        4,522.00
Total cost accounted for	$    1,45,912.00

Working

Reconciliation of Units
A	Opening WIP	3,100
B	Introduced	1,59,600
C=A+B	TOTAL	1,62,700
D	Transferred	1,57,100
E=C-D	Closing WIP	5,600

Statement of Equivalent Units
				Pulging		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	1,57,100			100%	1,57,100	100%	1,57,100
Closing WIP	5,600			100%	5,600	75%	4,200
Total	1,62,700			Total	1,62,700	Total	1,61,300

Cost per Equivalent Units
COST		Pulging	Conversion	TOTAL
Beginning WIP Inventory Cost		$            1,581	$           1,023	$              2,604
Cost incurred during period		$         84,650	$        58,658	$        1,43,308
Total Cost to be accounted for		$         86,231	$        59,681	$        1,45,912
Total Equivalent Units		1,62,700	1,61,300
Cost per Equivalent Units		$              0.53	$             0.37	$                 0.90

Statement of cost
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Pulging	$                    0.53	5,600	$           2,968	$        1,57,100	$        83,263
Conversion	$                    0.37	4,200	$           1,554	$        1,57,100	$        58,127
TOTAL	$            1,45,912	TOTAL	$           4,522	TOTAL	$     1,41,390