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

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 Dep

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: Units 5,000 8,000 Work in process inventory, March 1 Work in process inventory, March 31 Pulping cost in work in process inventory, March 1 Conversion cost in work in process inventory, March 1 Units transferred to the next production department Pulping cost added during March Conversion cost added during March Percent Completed Pulping Conversion 100% 20$ 100% 25% $ 4,800 $ 500 157,000 $ 102,450 $ 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 we 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. Required 1 Required 2 Required 3 Required 4 Required 5 Compute the Drying Department's equivalent units of production for pulping and conversion in March. Pulping Conversion Equivalent units of production

Answers

Solution

Material Conversion
Equivalent Units of Production                  165,000                 159,000

.

Material Conversion
Cost per equivalent Unit $                    0.65 $                   0.20

.

Material Conversion Total
Ending Inventory $ 5,200 $ 400 $ 5,600

.

Material Conversion Total
Units Completed and transferred $ 102,050 $ 31,400 $ 133,450

.

Cost Reconciliation
Costs to be accounted for:
Beginning Wip cost $ 5,300
Cost incurred during period $ 133,750
Total cost to be accounted for $ 139,050
Costs accounted for as follows:
Cost of Units Transferred Out $ 133,450
Cost of Ending Wip $ 5,600
Total cost accounted for $ 139,050

Working

Reconciliation of Units
A Beginning WIP                     5,000
B Introduced                 160,000
C=A+B TOTAL                 165,000
D Transferred out                 157,000
E=C-D Ending WIP                     8,000

.

Statement of Equivalent Units(Weighted average)
Material Conversion cost
Units Complete % Equivalent units Complete % Equivalent units
Transferred out                  157,000 100%                  157,000 100%                 157,000
Ending WIP                      8,000 100%                       8,000 25%                     2,000
Total                  165,000 Total                  165,000 Total                 159,000

.

Cost per Equivalent Units (Weighted average)
COST Material Conversion cost TOTAL
Beginning WIP Inventory Cost $ 4,800 $ 500 $ 5,300
Cost incurred during period $ 102,450 $ 31,300 $ 133,750
Total Cost to be accounted for $ 107,250 $ 31,800 $ 139,050
Total Equivalent Units                 165,000                  159,000
Cost per Equivalent Units $                   0.65 $                     0.20 $                0.85

.

Statement of cost (Weighted average)
Cost Equivalent Cost/unit Ending WIP Transferred
Units Cost Allocated Units Cost Allocated
Material $ 0.65                     8,000 $             5,200.00             157,000 $        102,050.00
Conversion cost $ 0.20                     2,000 $                400.00             157,000 $          31,400.00
TOTAL $ 139,050 TOTAL $ 5,600 TOTAL $ 133,450


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