Question

Exercise 5-11 Comprehensive Exercise; Second Production Department-Weighted-Average Method [LO5-2, LO5-3, LO5-4, LO5-5]

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:

		Percent Completed
	Units	Pulping/Materials			Conversion
Work in process inventory, March 1	3,100	100	%		80	%
Work in process inventory, March 31	7,200	100	%		75	%
Pulping cost in work in process inventory, March 1				$	1,054
Conversion cost in work in process inventory, March 1				$	496
Units transferred to the next production department					138,100
Pulping cost added during March				$	51,254
Conversion cost added during March				$	28,204

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.

Required 1

Equivalent units of production => Pulping: Conversion:

Required 2

Cost per equivalent unit => Pulping: Conversion:

Required 3

Cost of ending work in process inventory=> Pulping: Conversion: Total:

Required 4

Cost of units completed and transferred out=> Pulping: Conversion: Total:

Required 5

Drying Department

Cost Reconciliation

Costs to be accounted for
Total cost to be accounted for
Costs accounted as follows:
Total cost accounted for

Answer 1

Equivalent unit of production

	Physical unit	%	EUP-Pulping	%	EUP-Conversion
Unit transferred out	138100	100%	138100	100%	138100
Ending work in process	72000	100%	7200	75%	5400
Total	145300		145300		143500

Cost per equivalent unit

	Pulping	Conversion
Beginning WIP	1054	496
Cost added	51254	28204
Total Cost	52308	28700
Equivalent unit	145300	143500
Cost per equivalent unit	0.36	0.20

Cost of ending work in process

	Pulping	Conversion	Total
Cost of ending work in process	7200*.36= 2592	7200*75%*.20 = 1080	3672

Cost of unit transferred out

	Pulping	Conversion	Total
Cost of unit transferred out	138100*.36 = 49716	138100*.20 = 27620	77336

Cost reconciliation

Cost to be accounted for
Beginning work in process	1550
Cost added	79458
Total Cost to be accounted for	81008
Cost accounted as follows
Cost of unit transferred out	77336
Cost of ending work in process	3672
Total Cost accounted for	81008