Exercise 21-15 Santana Mortgage Company uses a process cost system to accumulate

Question

Exercise 21-15 Santana Mortgage Company uses a process cost system to accumulate costs in its Application Department. When an application is completed, it is forwarded to the Loan Department for final processing. The following processing and cost data pertain to September. 1. Applications in process on September 1, 100 2. Applications started in September, 1,000 3. Completed applications during September, 800 4. Applications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs. Beginning WIP: Direct materials $1,000 Conversion costs 3,960 September costs: Direct materials $4,500 Direct labor 12,000 Overhead 9,520 Materials are the forms used in the application process, and these costs are incurred at the beginning of the process. Conversion costs are incurred uniformly during the process. Determine the equivalent units of service (production) for materials and conversion costs. Materials Conversion Costs The equivalent units of service (production) LINK TO TEXT LINK TO TEXT Compute the unit cost. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs $ $ LINK TO TEXT LINK TO TEXT Prepare a cost reconciliation schedule. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.) Costs accounted for: Transferred out $ Work in process, September 30 Materials $ Conversion costs Total costs $ LINK TO TEXT LINK TO TEXT

Explanation / Answer

Ending WOrk in process=Beginning +started-transfered out

        = 100+1000-800

            = 300

Material conversion cost Units completed and transfered out 800 800 Ending WIP 300 300*.6= 180 Equivalent units 1100 980 cost incurred 1000+4500=5500 3960+12000+9520=25480 cost per equivalent unit 5500/1100 = $ 5 per application 25480/980 =$ 26 per application

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.