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Scribners Corporation produces fine papers in three production departments—Pulping, Drying, and Finishing. In the Pulping Department,...

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 3,500 100 % 80 %
Work in process inventory, March 31 5,500 100 % 70 %
Pulping cost in work in process inventory, March 1 $ 1,645
Conversion cost in work in process inventory, March 1 $ 1,050
Units transferred to the next production department 154,900
Pulping cost added during March $ 78,555
Conversion cost added during March $ 52,925

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.

Complete this question by entering your answers in the tabs below.

Prepare a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places.)

Complete this question by entering your answers in the tabs below.

  • Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March. (Round your intermediate calculations to 2 decimal places.)

  •
    Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March. (Round your intermediate calculations to 2 decimal places.)
    Pulping Conversion Total
    Cost of ending work in process inventory

Compute the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March. (Round your intermediate calculations to 2 decimal places.)
Pulping Conversion Total
Cost of units completed and transferred out
Prepare a cost reconciliation report for the Drying Department for March. (Round your intermediate calculations to 2 decimal places.)
Drying Department
Cost Reconciliation
Costs to be accounted for:
Total cost to be accounted for $0
Costs accounted for as follows:
Total cost accounted for $0

Solutions

Expert Solution

1.

Equivalent units of production (EUP) - Weighted Average method
Units % Pulping EUP-Pulping % Conversion EUP- Conversion
Units Completed and transferred out 154900 100% 154900 100% 154900
units of Ending work in process 5500 100% 5500 70% 3850
Equivalent units of production 160400 158750

2.

Cost per Equivalent unit: Pulping Conversion
Cost of Beginning Work in Process $1,645 $1,050
Cost added during march $78,555 $52,925
Total Costs $80,200 $53,975
/Equivalent units of Production 160400 158750
Cost per Equivalent unit of Production $0.50 $0.34

3.

Cost of ending work in process EUP Cost per EUP Total Cost
Pulping 5500 $0.50 $2,750
Conversion 3850 $0.34 $1,309
Total Ending work in process $4,059

4.

Cost of Units Transferred Out EUP Cost per EUP Total Cost
Pulping 154900 $0.50 $77,450
Conversion 154900 $0.34 $52,666
Total transferred out $1,30,116

5.

Drying Department
Cost Reconciliation
Particulars Amount
Costs to be accounted for:
Cost of beginning WIP inventory $2,695
Cost added to production $1,31,480
Total Cost to be accounted for $1,34,175
Costs accounted for as follows:
Cost of unit transferred out $1,30,116
Cost of Ending WIP $4,059
Total cost accounted for $1,34,175

ekkarill92 answered 1 year ago
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