Clearwater Paper Company manufactures rolled finished paper. Following is the in
ID: 2467757 • Letter: C
Question
Clearwater Paper Company manufactures rolled finished paper. Following is the information relative to the departmental costs and production:
Cooking:
Costs:
Beginning WIP:
Direct materials $20,000
Conversion $20,000
Costs incurred during June 2010:
Direct materials $80,000
Conversion $20,000
Units: Beginning WIP 10,000
Units completed 60,000
Ending WIP 12,000
100% complete for materials
50% complete for conversion
Coating:
Costs:
Beginning WIP:
Transferred in $25,000
Direct materials $20,000
Conversion $4,000
Costs incurred during June 2010:
Transferred in ?
Direct materials $42,000
Conversion $6,000
Units:
Beginning WIP 10,000
Completed 62,000
Ending WIP:
50% complete for both materials and conversion
Drying:
Costs:
Beginning WIP:
Transferred in $35,000
Direct materials $0
Conversion $25,000
Cost incurred during June 2010:
Transferred in ?
Direct materials $15,000
Conversion costs $30,000
Units: Beginning WIP 15,000
Completed 70,000
Ending WIP: ?
80% for conversion, 0% for direct materials
Required:
Compute equivalent units for each department.
Compute cost per unit for each department.
Price out the ending inventories for each department. (Reconciliation)
Explanation / Answer
Equivalent units are units in production multiplied by those percentage of units that are completed or those that are in process
Coating the transferred in amount if $35000
Ending WIP=$7000
Cost per equivalent unit is Total cost /number of units
80,000+20,000/60,000
1,00,000/60,000=$1.6 for cooking
83,000/62,000=$1.3
Ending inventory could not be ascertained due to the absence of time periods
Units (Cooking) Complete Equivalent Units Completed and transfered 60,000 100% 60,000 WIP (ending) 12,000+60,000=72,000 50% 36,000 96,000Related Questions
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