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Scribners Corporation produces fine papers in three production departments—Pulpi
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:
UnitsPercent Completed
PulpingConversion
Work in process inventory, March 13,900100%80%
Work in process inventory, March 317,000100%80%
Pulping cost in work in process inventory, March 1$ 1,755
Conversion cost in work in process inventory, March 1$ 1,053
Units transferred to the next production department150,500
Pulping cost added during March$ 72,270
Conversion cost added during March$ 47,338
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:
For March:
Compute the Drying Department’s equivalent units of production for pulping and conversion.
Compute the Drying Department’s cost per equivalent unit for pulping and conversion.
Compute the Drying Department’s cost of ending work in process inventory for pulping, conversion, and in total.
Compute the Drying Department’s cost of units transferred out to the Finishing Department for pulping, conversion, and in total.
Prepare a cost reconciliation report for the Drying Department.
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