Question

Exercise 3-15 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 $1,120 Conversion costs 4,590 September costs: Direct materials $5,260 Direct labor 12,100 Overhead 9,476 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 $ Click if you would like to Show Work for this question:

Answer 1

Equivalent unit :

	Unit	%	EUP-Material	%	EUP-Conversion
Unit completed and transferred out	800	100%	800	100%	800
Ending WIP	300	100%	300	60%	180
Equivalent unit of production	1100		1100		980

Unit Cost

	Material	Conversion
Beginning WIP	1120	4590
Cost added	5260	21576
Total Cost	6380	26166
Equivalent unit	1100	980
Unit Cost	5.8	26.7

Cost reconciliation

Unit Transferred out (26.7+5.8*800)		26000
Cost of ending WIP
Material (300*5.8)	1740
Conversion (180*26.7)	4806	6546
Total Cost accounted as		32546