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	3,200	100	%		80	%
Work in process inventory, March 31	4,800	100	%		75	%
Pulping cost in work in process inventory, March 1				$	1,808
Conversion cost in work in process inventory, March 1				$	1,248
Units transferred to the next production department					174,200
Pulping cost added during March				$	103,802
Conversion cost added during March				$	75,206

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

Answer 1
Computation of the Drying Department's equivalent units of production for pulping and conversion in March.
	Physical Units	% complete of Pulping	Equivalent units for Pulping	% complete of Conversion cost	Equivalent units for Conversion cost
Units completed and transferred	174200	100%	174200	100%	174200
Units in ending work in process	4800	100%	4800	75%	3600
Equivalent Units of production			179000		177800
Answer 2
Computation of the Drying Department's cost per equivalent unit for pulping and conversion in March.
	Pulping	Conversion
Cost of beginning Work in process	$1,808.00	$1,248.00
Cost added in March	$103,802.00	$75,206.00
Total Cost to account for	$105,610.00	$76,454.00
/ Equivalent Units of production	179000	177800
Cost per equivalent unit	$0.59	$0.43
Answer 3
Computation of the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March.
Cost of ending work in process Inventory
Pulping [4800 EU x $0.59]	$2,832
Conversion cost [3600 EU x $0.43]	$1,548
Total Cost of ending work in process Inventory	$4,380
Answer 4
Computation of the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March.
Pulping [174200 EU x $0.59]	$102,778
Conversion cost [174200 EU x $0.43]	$74,906
Total Cost of units transferred out to the Finishing department	$177,684
Answer 5
A cost reconciliation report for the Drying Department for March.
Cost to account for	Pulping	Conversion	Total
Cost of beginning Work in process,March 1	$1,808.00	$1,248.00	$3,056.00
Cost added in March	$103,802.00	$75,206.00	$179,008.00
Total Cost to account for	$105,610.00	$76,454.00	$182,064.00
Cost accounted for
Cost of ending work in process			$4,380.00
Cost of units transferred out to the Finishing department			$177,684.00
TotaL Cost accounted for			$182,064.00