Question
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 | 4,100 | 100 | % | 80 | % | |
| Work in process inventory, March 31 | 6,500 | 100 | % | 60 | % | |
| Pulping cost in work in process inventory, March 1 | $ | 1,189 | ||||
| Conversion cost in work in process inventory, March 1 | $ | 615 | ||||
| Units transferred to the next production department | 139,300 | |||||
| Pulping cost added during March | $ | 44,009 | ||||
| Conversion cost added during March | $ | 26,593 | ||||
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.
Answers
1) Computation the Drying Department's equivalent units of production using for pulping andweighted average method conversion in March :
equivalent units particular units pulping conversion costs units % of completion units % of completion Units completed and transferred to the next production department 139300 139300 100 139300 100 ending wip 6500 6500 100 3900 60 total 145800 145800 143200 2) Compute the Drying Department's cost per equivalent unit for pulping and conversion in March :
particular costs total equibvalent units cost per equivalent pulping : beginning wip $1189 added during the month $44009 total pulping $45198 145800 $45198/145800 = $0.31 conversion costs : beginning wip $615 added during the month $26593 total conversion costs $27208 143200 $27208/143200 = $0.19 3) Compute the Drying Department's cost of ending work in process inventory for pulping, conversion, and in total for March :
particular equivalent units cost per equivalent unit total cost ending wip : pulping 6500 $0.31 6500 x $0.31 = $2015 conversion cost 3900 $0.19 3900 x $0.19 = $741 total $2756 4) Compute the Drying Department's cost of units transferred out to the Finishing Department for pulping, conversion, and in total in March :
particular equivalent units cost per equivalent unit total cost cost of units transferred out to the Finishing Department : pulping 139300 $0.31 139300 x $0.31 = $43183 conversion cost 139300 $0.19 139300 x $0.19 = $26467 total $69650 5) Preparatio of a cost reconciliation report for the Drying Department for March :
cost reconciliation total cost to be accounted for : cost accounted as follows :- cost of units completed and transferred out : pulping 139300 x $0.31 = $43183 conversion costs 139300 x $0.19 = $26467 total cost of units completed and transferres out $69650 $69650 cost of ending inventory : pulping 6500 x $0.31 = $2015 cnversion costs 3900 x $0.19 = $741 total cost of ending inventory $2756 $2756 ttal cost accounted for $72406 thank you
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