ment, 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 Conversions
Work in process inventory, March 1 5,000 100% 20%
Work in process inventory, March 31 8,000 100% 25%
Pulping cost in work in process inventory, March 1 $4800
Conversion cost in work in process inventory, March 1 $500
Units transferred to the next production department 1,57,000
Pulping cost added during March $102,450
Conversion cost added during March $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 batchcs; cach 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:
a. Determine the equivalent units for March for pulping and conversion.
b. Compute the costs per equivalent unit for March for pulping and conversion.
c. Determine the total cost of ending work in process inventory and the total cost of units transferred to the Finishing Department in March.
d. Prepare a cost reconciliation report for the Drying Department for March.
