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 5,000 100 % 20 % Work in process inventory, March 31 8,000 100 % 25 % Pulping cost in work in process inventory, March 1 $ 4,800 Conversion cost in work in process inventory, March 1 $ 500 Units transferred to the next production department 157,000 Pulping cost added during March $ 102,450 Conversion cost added during March $ 31,300 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.

4. Prepare a cost reconciliation report for the Drying Department for March

Cots to be accounted for:

Blank Blank amount

Blank Blank amound

Total cash to be accounted for:

Costs accounted for as follows:   

Blank Blank amound

Blank Blank amound

Total costs accounted for:

Answer 1

UNITS TO ACCOUNT FOR:
Beginning Work in Process units				5,000
Add: Units Started in Process				160,000
Total Units to account for:				165,000
UNITS TO BE ACCOUNTED FOR:
Units started and completed				157,000
Ending Work in Process				8,000
Total Units to be accounted for:				165,000
Equivalent Units:
			Material Cost		Conversion
			% Completion	Units	% Completion	Units
Units started and completed			100%	157,000	100%	157,000
Ending Work in Process			100%	8,000	25%	2,000
Total Equivalent units				165,000		159,000
TOTAL COST TO ACCOUNT FOR:
			Material		Conversion
Beginning work in Process			4,800		500
Cost Added during May			102,450		31,300
Total Cost to account for:			107,250		31,800
Total Cost to account for:					139,050
COST PER EQUIVALENT UNIT:
			Material		Conversion
Total cost added during the year			107,250		31,800
Equivalent Units			165,000		159,000
Cost per Equivalent unit			0.65		0.2
TOTAL COST ACCOUNTED FOR:
Units started and Transferred out (157000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			157,000	0.65	102050
Conversion Cost			157,000	0.2	31400
Total Cost of Units completed and transferred out:					133450
Ending Work in process (8,000 units)
			Equivalent unit	Cost per EU	Total Cost
Material			8,000	0.65	5200
Conversison Cost			2,000	0.2	400
Total cost of Ending Work in process:					5,600
Cost Reconciliation Statement:
Cost to be accounted for:
Cost of beginning WIP				5300
Current cost a dded				133750
Total cost to be accounted for				139050
Cost accounted for:
Cost of units transferred out				133450
Costs of Ending WIP				5600
Total cost accounted for				139050