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 2,700 100 % 80 % Work in process inventory, March 31 7,500 100 % 70 % Pulping cost in work in process inventory, March 1 $ 1,080 Conversion cost in work in process inventory, March 1 $ 594 Units transferred to the next production department 142,200 Pulping cost added during March $ 61,794 Conversion cost added during March $ 37,743 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

Costs Charged to Production
Costs of Beginning WIP	1,674
Costs incurred this period	99,537
Total Costs to account for	101,211
Total costs accounted for	101,211
Difference due to rounding cost/unit	-
Unit Reconciliation
Units to account for:
Beginning WIP	2,700
Started into Production - 149,700 - 2,700	147,000
Total units to account for	149,700
Total units accounted for
Completed during the period	142,200
Ending WIP	7,500
Total units accounted for	149,700
Equivalent Units of Production (EUP) - Weighted Average Method
	Units	% Material	EUP-Materials	% Conversion	EUP-Conversion
Completed during the period	142,200	100%	142,200	100%	142,200
Ending WIP	7,500	100%	7,500	70%	5,250
Equivalent Units of Production (EUP)			149,700		147,450
Cost per EUP			Materials		Conversion
Beginning WIP			1,080		594
Cost Incurred during the period			61,794		37,743
Total Costs		Costs	62,874	Costs	38,337
Equivalent Units of Production (EUP)		EUP	149,700	EUP	147,450
Cost per Equivalent Units of Production			0.42		0.26
Cost Assignment and Reconciliation
Costs Transferred Out	EUP	Cost per EUP	Total Cost
Direct Materials	142,200	0.42	59,724
Conversion	142,200	0.26	36,972
Total transferred Out			96,696
Costs of Ending WIP	EUP	Cost per EUP	Total Cost
Direct Materials	7,500	0.42	3,150
Conversion	5,250	0.26	1,365
Total Ending WIP			4,515
Total costs accounted for				101,211
Answer 1.
Equivalent Units - Pulping	149,700
Equivalent Units - Conversion	147,450
Answer 2.
Cost per Equivalent Unit
Pulping	0.42
Conversion	0.26
Answer 3.
Cost of Ending WIP
Pulping	3,150
Conversion	1,365
Total	4,515
Answer 4.
Cost of Units Transferred Out	96,696
Answer 5.
Costs Charged to Production
Costs of Beginning WIP	1,674
Costs incurred this period	99,537
Total Costs to account for	101,211
Total costs accounted for	101,211
Difference due to rounding cost/unit	-