Question

Exercise 4-11 (Static) Comprehensive Exercise; Second Production Department--Weighted-Average Method (L04-2, LO4-3, LO4-4, LO4-5) 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 5,000 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 1004 204 100% 254 $ 4,800 $ 500 157,000 $102,450 $ 31,300 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 5. Prepare a cost reconciliation report for the Drying Department for March. in March. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5

Answer 1

Answers

• Requirement 1

	Pulping	Conversion
Equivalent units of production	165,000	159,000

EUP - Weighted Average Method	Units	% Pulping	EUP Pulping	% Conversion	EUP - Conversion
Units TRANSFERRED	157,000	100%	157,000	100%	157,000
Units of ENDING WIP	8,000	100%	8,000	25%	2,000
Equivalent Units of Production			165,000		159,000

• [2]

	Pulping	Conversion
Cost per Equivalent units	$                         0.65	$                              0.20

COST per EUP			Pulping		Conversion
Cost of Beginning WIP			$             4,800.00		$                                        500.00
Cost incurred during the period			$        102,450.00		$                                  31,300.00
Total Costs		Costs	$        107,250.00	Costs	$                                  31,800.00
Equivalent units of production		EUP	165,000	EUP	159,000
Cost per EUP			$              0.65000		$                                      0.20000

• [3]

	Pulping	Conversion	Total
Cost of ending WIP Inventory	$                 5,200.00	$                          400.00	$                         5,600.00

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Pulping	8,000	$                      0.65	$             5,200.00
- Conversion	2,000	$                      0.20	$                400.00
Total cost of ending WIP				$                 5,600.00

• [4]

	Pulping	Conversion	Total
Cost of units completed & transferred out	$            102,050.00	$                    31,400.00	$                     133,450.00

Cost of Units Transferred Out	EUP	Cost per EUP	Total Cost
- Pulping	157,000	$                      0.65	$        102,050.00
- Conversion	157,000	$                      0.20	$          31,400.00
Total Cost transferred Out				$            133,450.00

• [5]

Costs to be accounted for:
Cost of Beginning WIP Inventory	$              5,300.00
Cost added to production during the period	$         133,750.00
Total Cost to be accounted for	$         139,050.00
Costs accounted for as follows:
Cost of units transferred out	$         133,450.00
Cost of Ending WIP Inventory	$              5,600.00
Total Cost accounted for	$         139,050.00
Difference due to rounding off	$                           -