Scribners Corporation produces fine papers in three production departments-Pulpi

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 Work in process inventory, March 1 Work in process inventory, March 31 Units Pulping 5.000 100% 8,000 100% Conversion 20% 25% 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 $ 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 wet fibers produces a set amount of dried paper that is passed on to the Finishing Department. Required: 1. Determine the equivalent units for March for pulping and conversion Pulping Conversion Equivalent units of production 2. Compute the costs per equivalent unit for March for pulping and conversion. (Round your answers to 2 decimal places.) Pulping Conversion Cost per equivalent unit

Explanation / Answer

A Units transferred to the next production department 157000 B Units in closing work in process 8000 C % of completion of closing WIP -Pulping 100% D % of completion of closing WIP -Conversion 25% Pulping Conversion 1 Equivalent units of production 165000 159000 (A + B x C ) , (A + B x D) 2 Cost per equivalent units for March $ $ Work in process cost -March 1 4800 500 Cost added during March 102450 31300 E Total Cost 107250 31800 F Equivalent units of Production 165000 159000 Cost per Equivalent units (E /F ) 0.65 0.2 3 Cost of ending work in process and units transferred Total G Closing stock of WIP (Eqivalent units) 8000 2000 (B x C) , (B x D) H Cost per equivalent units 0.65 0.2 Cost of ending work in process (8000 x 0.65 + 2000 x 0.20) 5600 Cost of units transferred (157000 x ( 0.65 + 0.20) ) 133450

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