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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, 100
2. Applications started in September, 900
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 $1,320
    Conversion costs 4,230
September costs:
    Direct materials $3,880
    Direct labor 12,210
    Overhead 6,968

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

Materials

Conversion Costs
The equivalent units of service (production)

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

Materials

Conversion Costs
Unit costs

$

$

3. 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

$

Solutions

Expert Solution

Material Conversion
1) Equivalent Units 1000 880
2) Unit cost 5.20 26.60
3) cost reconciliation schedule
Transferred out             22,260
Work in process, September 30
   Materials          1,560
   Conversion costs          4,788               6,348
Total costs             28,608
Santana Mortgage Company
Production Cost Report
Actual Units
Caluclation of Physical UNITS:
Units in begining inventory 100
Units started during the period 900
Units to be accounted for 1000
Actual Units Equivalent Units
Material Conversion
Units Completed and Transferred 700 700 700
Units in ending inventory 300 300 180
Total accounted for 1000 1000 880
Costs to be acounted for:
Total Material Conversion
Costs in beginning inventory 5550 1320 4230
Cost added dueing the year 23058 3880 19178
Total cost to account for 28608 5200 23408
Equivalent Units from above 1000 880
Cost per equivalnet unit 31.80 5.20 26.60
Total Material CC
Cost Accounted for
Units completed and transfer 22260 3640 18620
Units in ending inventory 6348 1560 4788
   Total Cost Accounted for 28608 5200 23408

ekkarill92 answered 1 year ago
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