Question

Cost Information

During October, McCourt Associates incurred total production costs of $85,500 for copyediting manuscripts and had the following equivalent units schedule:

Units completed	285
Units in EWIP × Fraction complete: 25 × 0.6	15
Equivalent units	300

Required:

1. Calculate the cost of copyediting one manuscript for October.
$ per manuscript

2. Assign costs to manuscripts completed and to EWIP and then do a cost reconciliation.

Manuscripts completed	$
EWIP
Total assigned	$

3. What if the costs assigned to units completed and EWIP total were calculated using a unit cost of $310? Calculate the total costs assigned.
$

What is the discrepancy between the costs assigned and the costs to account for?
$

Answer 1

1) Cost of one manuscript = 85500/300 = 285 per manuscript

2)

Manuscripts completed (285*285)	81225
EWIP (285*15)	4275
Total Assigned	85500

3. What if the costs assigned to units completed and EWIP total were calculated using a unit cost of $310? Calculate the total costs assigned.

Manuscripts completed = 285*310 = 88350

EWIP = 310*15 = 4650

Total Cost assigned = (285*310)+(310*15) = 93000

4) What is the discrepancy between the costs assigned and the costs to account for?

93000-85500 = 7500