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 3,000 8,500 100% 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% 80% BOX $ 1,155 $ 630 141,800 $ 60,468 $36,520 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the Drying Department's equivalent units of production for pulping and conversion in March, Pulping Conversion Equivalent units of production

Answer 1

1 Equivalents units of Production Pulping 141,800 Conversion 141,800 Transferred to next department Equivalent units in ending work in process inventory Pulping: 8,500 x 100% Conversion : 8,500 x 80% Equivalents units of Production 8,500 6,800 148,600 150,300 2 Cost per Equivalent Unit Cost of beginning Work in progress Cost Added during the period Total Cost (a) Equivalents units of Production (b) Cost per Equivalent Unit (a)/(b) Pulping Conversion $ 1,155 $ 630 $ 60,468 $ 36,520 $ 61,623 $ 37,150 150,300 148,600 $ 0.41 $ 0.25

3 Cost of Ending Work-in-progress Pulping Conversion Equivalent units in ending work in process inventory (from part 1) (c) Cost per Equivalent Unit (from part 2) (d) Cost of Ending Work-in-progress (c) x (d) Total Cost of Ending Work-in-progress $ $ $ 8,500 0.41 $ 3,485 $ 5,185 6,800 0.25 1,700 4 Cost of units transferred out Units Transferred to next department (e) Cost per Equivalent Unit (from part 2) (f) Cost of units transferred out (e) x (f) Total Cost of units transferred out Pulping Conversion 141,800 141,800 $ 0.41 $ 0.25 $ 58,138 $ 35,450 $ 93,588

5 Cost Reconciliation Report Costs to be accounted for: Costs in the beginning of the process ($1,155+$630) Costs added during the process ($60,468+$36,520) Total costs to be accounted for $ 1,785 $ 96,988 $ 98,773 Costs accounted for as follows: Total Cost of Ending Work-in-progress (Part 3) Total Cost of units transferred out (Part 4) Total costs accounted for $5,185.00 $ 93,588 $ 98,773

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