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In: Accounting

Exercise 21-6 The Cutting Department of Cassel Company has the following production and cost data for...

Exercise 21-6 The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs 1. Transferred out 12,000 units. Beginning work in process $0 2. Started 3,000 units that are 60% Materials 45,000 complete as to conversion Labor 16,200 costs and 100% complete as Manufacturing overhead 18,300 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 LINK TO TEXT LINK TO TEXT Compute unit costs. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials $ Conversion 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.) Cost Reconciliation Costs accounted for Transferred out $ Work in process, July 31 Materials $ Conversion costs Total costs $ LINK TO TEXT LINK TO TEXT

Solutions

Expert Solution

Answer:

(1)

Material

Conversion

Equivalent Unit of production

15000

13800

Working notes for the above answer is as under

Unit

Material

Conversion

Transferred Out

12000

12000

12000

Add: Work in process July

3000x100%

3000

3000

3000x60%

1800

Equivalent Unit of production

15000

15000

13800

______________________________________________________________________

(2)

Martial

Conversion

Cost incurred during the period (a)

45000

34500

Equivalent Unit of production (b)

15000

13800

Equivalent Cost per unit (a/b)

3

2.50

.

_______________________________________

(3)

Cost Reconciliation         

Cost accounted for transferred out
(12000*(3+2.5)

66000

work In process July ,31

Material (3000*3)

9000

Conversion (1800*2.5)

4500

Total Cost

79500


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