Determine the equivalent units of service for materials cost

Assignment Help Cost Accounting

Reference no: EM131807134

Exercise

Santana Mortgage Company uses a process costing 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	$1,150
Conversion costs	4,960
September costs:
Direct materials	$4,977
Direct labor	12,600
Overhead	7,884

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.

Santana Mortgage Company uses the FIFO method. Also, assume that the applications in process on September 1 were 100% complete as to materials (forms) and 40% complete as to conversion costs.

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

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

Prepare a cost reconciliation schedule.

Reference no: EM131807134

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