Reference no: EM131762021

Handout Problem 5-2

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:

1. Compute equivalent units for each department.
2. Compute cost per unit for each department.
3. Price out the ending inventories for each department.(Reconciliation)