P21-3A Greenply produces exterior siding for homes. The Preparation Department begins with wood, which is chopped into small bits. At the end of the process, an adhesive is added. Then the wood/adhesive mixture goes on to the Compression Department, where the wood is compressed into sheets. Assume conversion costs are added evenly throughout the prepa- ration process. Suppose that April data for the Preparation Department are as follows (in mil- lions): Sheets Beginning work in process inventory Started production.. Completed and transferred out to Compression in April. Ending work in process inventory (40% of the way through the preparation process) Costs 0 sheets Beginning work in process inventory..... $ 0 1.500 sheets Costs added during April: Wood.. 1.650 950 sheets Adhesives. 380 Direct labor 205 Manufacturing overhead 497 550 sheets Total costs. $2.732 Required 1. Draw a time line for the Preparation Department, similar to Exhibit 21-6. 2. Use the time line to help you compute the equivalent units for direct materials and for conversion costs. (Hint: Each direct material added at a different point in the production process requires its own equivalent-unit computation.) 3. Compute the total costs of the units (sheets).

a. Completed and transferred out to the Compression Department

b. In the Preparation Department's ending work in process inventory 4. Prepare the journal entry to record the cost of the sheets completed and transferred out to the Compression Department. 5. Post the journal entries to the Work in Process Inventory-Preparation T-account. What is the ending balance?