Exercise 3-6 The Cutting Department of Cassel Company has the following producti

Question

Exercise 3-6 The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs 1. Transferred out 12,400 units 2. Started 3,400 units that are 60% Beginning work in process Materials Labor Manufacturing overhead $0 55,774 8,557 22,200 complete as to conversion costs and 100% complete as to materials at July 31 Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Determine the equivalent units of production for(1) materials and (2) conversion costs. Materials Conversion Costs Total equivalent units of production Compute unit costs. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion costs

Explanation / Answer

a) Equivalent unit :

Calculate unit cost :

Material = 55774/15800 = 3.53 per unit

Conversion cost = (8557+22200)/14440 = 2.13 per unit

Prepare cost reconciliation schedule :

Material Conversion Unit transferred out 12400 12400 Ending work in process 3400 3400*60% = 2040 Equivalent unit of production 15800 14440

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