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	3,700	100	%		80	%
Work in process inventory, March 31	8,500	100	%		80	%
Pulping cost in work in process inventory, March 1				$	2,516
Conversion cost in work in process inventory, March 1				$	1,517
Units transferred to the next production department					162,500
Pulping cost added during March				$	118,894
Conversion cost added during March				$	74,668

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.

Answer 1

1
	Pulping	Conversion
Units completed and transferred out	162500	162500
Work in process, ending:
8500 X 100%	8500
8500 X 80%		6800
Equivalent units of production	171000	169300
2
	Pulping	Conversion
Work in process, March 1	2516	1517
Cost added during March	118894	74668
Total costs	121410	76185
Divide by Equivalent units of production	171000	169300
Cost per Equivalent unit	0.71	0.45
3
	Pulping	Conversion	Total
Work in process, ending units	8500	6800
X Cost per Equivalent unit	0.71	0.45
Cost of ending work in process inventory	6035	3060	9095
4
	Pulping	Conversion	Total
Units completed and transferred out	162500	162500
X Cost per Equivalent unit	0.71	0.45
Cost of Units completed and transferred out	115375	73125	188500
5
Cost Reconciliation:
Cost to be accounted for:
Cost of Beginning work in Process inventory	4033
Cost added to production during March	193562
Total Cost to be accounted for	197595
Cost accounted for as follows:
Cost of Units completed and transferred out	188500
Cost of ending work in process inventory	9095
Total Cost accounted for	197595