Scribners Corporation produces fine papers in three production departments—Pulpi
ID: 2414027 • Letter: S
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:
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.
Percent Completed Units Pulping Conversion Work in process inventory, March 1 3,400 100 % 80 % Work in process inventory, March 31 4,000 100 % 75 % Pulping cost in work in process inventory, March 1 $ 2,295 Conversion cost in work in process inventory, March 1 $ 1,360 Units transferred to the next production department 166,400 Pulping cost added during March $ 116,985 Conversion cost added during March $ 73,176Explanation / Answer
1) Equivalent units of production units % pulping % CC Completed & transferred 166,400 100% 166,400 100% 166,400 work in process inventory,March 31 4,000 100% 4,000 75% 3000 Equivalent units of production 170,400 169,400 2) cost per Equivalent units pulping CC total Beginning work in process 2,295 1,360 3,655 cost added during the year 116,985 73,176 190,161 total cost 119,280 74,536 193,816 equivalent units 170,400 169,400 cost per EUP 0.7 0.44 1.14 3) Cost of ending work in proces pulping 4,000 * 0.7 = 2800 Conversion 3000 * 0.44 = 1320 Cost of ending work in proces 4120 4) Cost of units transferred pulping 166,400 * 0.7 = 116480 conversion 166,400 * 0.44 = 73216 Cost of units transferred 189696 5) CostReconcilation report cost to be accounted Beginning work in process 3,655 cost added during the year 190,161 cost to be accounted 193,816 cost accounted for transferred cost 189,696 ending wip cost 4120 cost accounted for 193,816
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