Calculate the unit costs and prepare a cost reconciliation schedule. Hi-Tech Mor

Question

Calculate the unit costs and prepare a cost reconciliation schedule.

Hi-Tech Mortgage Company uses a process costing system to accumulate costs in its loan application department. When an app cation is completed, it is forwarded to the loan department for final processing. The following processing and cost data pertain to 1. Applications in process on September 1, 120 Applications started in September, 1,190 Beginning work in process Direct materials Conversion costs $1,110 3,910 2. September costs: 3. Completed applications during Direct materials Direct labour Overhead $6,750 11,900 10,734 September, 800 Applications still in process at September 30 were 100% complete in terms of materials (forms) and 60% complete in terms of conversion costs. 4,

Explanation / Answer

Materials Conversion costs Applications completed 800 800 Work in Process September 30 510 306 Equivalent units 1310 1106 Materials Conversion costs Total Unit costs: Costs in September 7860 26544 34404 Equivalent units 1310 1106 Unit costs 6 24 30 Costs to be accounted for: Work in Process September 1 5020 Started into production 29384 Total costs 34404 Cost reconciliation schedule: Costs accounted for: Transferred out 24000 =800*(6+24) Work in Process September 30 Materials 3060 =510*6 Conversion costs 7344 10404 =306*24 Total costs 34404

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