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Santana Mortgage Company uses a process cost system to accumulate costs in its Application Department. When...

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, 180 2. Applications started in September, 920 3. Completed applications during September, 640 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 $1,410 Conversion costs 4,300 September costs: Direct materials $4,596 Direct labor 12,240 Overhead 7,926 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) Compute the unit cost Prepare a cost reconciliation schedule

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Computation of Equivalent unit of Production - Weighted Average (Application Department)
Particulars Physical Units Material Conversion (Labor + Overhead)
Unit completed & Transferred out 640 640 640
Closing WIP: 460
Material (100%) 460
Conversion (60%) 276
Equivalent units of production 1100 1100 916
Computation of Cost per equivalent unit of Production - Weighted Average (Application Department)
Particulars Material Conversion (Labor + Overhead)
Opening WIP $1,410.00 $4,300.00
Cost Added during September $4,596.00 $20,166.00
Total cost to be accounted for $6,006.00 $24,466.00
Equivalent units of production 1100 916
Cost per Equivalent unit $5.46 $26.71
Computation of Cost of ending WIP and units completed & transferred out - Weighted Average (Application Department)
Particulars Material Conversion (Labor + Overhead) Total
Equivalent unit of Ending WIP 460 276
Cost per equivalent unit $5.46 $26.71
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) $2,512 $7,372 $9,883
Units completed and transferred 640 640
Cost of units completed & Transferred (Unit completed * cost per equivalent unit) $3,494 $17,094 $20,589
Production cost report - Weighted Average - Application Department
Particulars Amount
Costs to be accounted for:
Cost of beginning WIP inventort $5,710.00
Cost added to production $24,762.00
Total Cost to be accounted for $30,472.00
Costs accounted for as follows:
Cost of unit transferred out $20,589
Ending WIP:
Material $2,512
Converison $7,372
Total cost accounted for $30,472

ekkarill92 answered 1 year ago
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