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.	Determine the equivalent units for March for pulping and conversion.

  

              

2.	Compute the costs per equivalent unit for March for pulping and conversion. (Round your answers to 2 decimal places.)

  

     

3.	Determine the total cost of ending work in process inventory and the total cost of units transferred to the Finishing Department in March. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar.)

  

  

4.	Prepare a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar.)

  

rev: 09_29_2016_QC_CS-63658

Answer 1

1. Determine the equivalent units for March for pulping and conversion
Scribners Corporation
Drying Department
Cost of Production Report- Drying Department
For the Month Ended March 31
UNITS			Equivalent Units
	Physical Units	% complete	Pulping	% complete	Conversion
Units to be accounted for:
Work in process, beginning	3200
Started into production (Bal. fig)	175800
Total units	179000
Units accounted for:
Units transferred to the Finishing department	174200	100%	174200	100%	174200
Work in process, Ending	4800	100%	4800	75%	3600
Total units to be assigned costs	179000		179000		177800
2. Compute the costs per equivalent unit for March for pulping and conversion
COSTS	Costs
	Pulping	Conversion	Total
Unit Costs
Cost of beginning Work in process	$          1,808	$          1,248	$           3,056
Total Costs added during march	$      103,802	$        75,206	$       179,008
Total Cost to be accounted for	$      105,610	$        76,454	$       182,064
	÷	÷
Equivalent units	179000	177800
Cost per equivalent unit	$0.59	$0.43	$1.02
Costs to be accounted for

3. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Finishing Department in March.
						Equivalent units	Cost per equivalent unit		Total
Cost of Ending Work in proces inventory
Pulping	4800	$0.59	$2,832
Conversion Costs	3600	$0.43	$1,548	$4,380
Cost of units units transferred to the Finishing Department in March	174200	$1.02		$177,684
Total costs accounted for				$182,064
4. Prepare a cost reconciliation report for the Drying Department for March.
Scribners Corporation
Cost Reconciliation Schedule
	Total
Total Cost to be accounted for:
Cost of beginning Work in process	$          3,056
Costs added into production during june	$      179,008
Total Cost to be accounted for	$      182,064
Cost accounted for as follows:
Cost of Ending Work in proces inventory	$4,380
Cost of units completed Transferred out	$177,684
Total costs accounted for	$182,064

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