Question

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, 200
2.		Applications started in September, 1,000
3.		Completed applications during September, 700
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		$1,200
Conversion costs		4,860
September costs:
Direct materials		$5,160
Direct labor		13,100
Overhead		8,140

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.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Determine the equivalent units of service (production) for materials and conversion costs.

		Materials		Conversion Costs
The equivalent units of service (production)

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Incorrect answer iconYour answer is incorrect.

Compute the unit cost. (Round unit costs to 2 decimal places, e.g. 2.25.)

		Materials		Conversion Costs
Unit costs		$		$

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Incorrect answer iconYour answer is incorrect.

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		$

Answer 1

Work in Process, Beginning	200
Add: Units started during September	1000
Less: Units completed and transferred out	-700
Work in process, September 30	500
1
	Materials	Conversion Costs
Units completed and transferred out	700	700
Work in process, September 30	500	300	=500*60%
The equivalent units of service (production)	1200	1000
2
	Materials	Conversion Costs
Work in process, beginning	1200	4860
Cost added during September	5160	21240
Total costs	6360	26100
Divide by Equivalent units of production	1200	1000
Unit costs	5.30	26.10
3
Costs accounted for:
Transferred out		21980	=700*(5.30+26.10)
Work in process, September 30
Materials	2650		=500*5.30
Conversion costs	7830	10480	=300*26.10
Total costs		32460