Question

# Scribners Corporation produces fine papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department,...

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 3,400 100 % 80 % Work in process inventory, March 31 6,800 100 % 75 % Pulping cost in work in process inventory, March 1 \$ 1,445 Conversion cost in work in process inventory, March 1 \$ 850 Units transferred to the next production department 147,900 Pulping cost added during March \$ 68,170 Conversion cost added during March \$ 43,520

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.

Requirement 1

 Pulping Conversion Equivalent Units of Production 154,700 153,000

Requirement 2

 Pulping Conversion Cost per equivalent Unit \$                    0.45 \$              0.29

Requirement 3 and 4

 Pulping Conversion Total Ending Inventory \$ 3,060 \$ 1,479 \$ 4,539 Units Completed and transferred \$ 66,555 \$ 42,891 \$ 109,446

Requirement 5

 Cost Reconciliation Costs to be accounted for: Beginning Wip cost \$ 2,295 Cost incurred during period \$ 111,690 Total cost to be accounted for \$ 113,985 Costs accounted for as follows: Cost of Units Transferred Out \$ 109,446 Cost of Ending Wip \$ 4,539 Total cost accounted for \$ 113,985

Working

 Statement of Equivalent Units(Weighted average) Pulping Conversion cost Units Complete % Equivalent units Complete % Equivalent units Transferred 147,900 100% 147,900.0 100% 147,900 Closing WIP 6,800 100% 6,800.0 75% 5,100 Total 154,700 Total 154,700.0 Total 153,000

.

 Cost per Equivalent Units (Weighted average) COST Pulping Conversion cost TOTAL Beginning WIP Inventory Cost \$ 1,445 \$ 850 \$ 2,295 Cost incurred during period \$ 68,170 \$ 43,520 \$ 111,690 Total Cost to be accounted for \$ 69,615 \$ 44,370 \$ 113,985 Total Equivalent Units 154,700 153,000 Cost per Equivalent Units \$              0.45 \$                     0.29

.

 Statement of cost (Weighted average) Cost Equivalent Cost/unit Ending WIP Transferred Units Cost Allocated Units Cost Allocated Pulping \$ 0.45 6,800 \$             3,060.00 147,900 \$ 66,555 Conversion cost \$ 0.29 5,100 \$             1,479.00 147,900 \$       42,891.00 TOTAL \$ 113,985 TOTAL \$ 4,539 TOTAL \$ 109,446