ll Sprint 10:14 PM 51% i X Chapter 03 - Assignment Hele I Exercise 3-16 Santana
ID: 2341508 • Letter: L
Question
ll Sprint 10:14 PM 51% i X Chapter 03 - Assignment Hele I Exercise 3-16 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 Applications started in September, 900 . Completed applications during September, 600 pplications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs. Beginning WIp: Direct materials $1.300 4,760 September costs 12,200 7,644 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 (application forms) and 40% complete as to conversion costs. Your answer is partially correct. Try again. Determine the equivalent units of service (production) for materials and conversion costs. The equivalent units of service (preduction) Your answer is incorrect. Try again.Explanation / Answer
Answers
Material
Conversion Cost
The equivalent Units of Service (production)
900
820
Material
Conversion Cost
Unit Cost
$5.20
$24.20
Cost Accounted For
Applications Completed
Work in progress ,September 1
$ 6,060.00
Conversion cost
$ 2,904.00
$ 8,964.00
Started and Completed
$ 11,760.00
$ 20,724.00
Work in progress ,September 30
Material
$ 2,600.00
Conversion cost
$ 7,260.00
$ 9,860.00
Total Cost
$ 30,584.00
Working notes
Calculations step by step
STEP 1
Reconciliation of Units
Units
% already completed
% completed this period
Material
Conversion cost
Material
Conversion cost
Beginning WIP
200
100%
40%
0%
60%
Units introduced
900
Total units to be accounted for
1,100
Completed and Transferred unit
600
0%
0%
100%
100%
Ending WIP
500
0%
0%
100%
60%
STEP 2
Equivalent Units
Total Units
Materials
Conversion Cost
Units Transferred:
% completed this period
Equivalent Units
% completed this period
Equivalent Units
From WIP
200
0%
-
60%
120
From units started
400
100%
400
100%
400
Total
600
400
520
Total Units
Materials
Conversion Cost
Ending WIP
% completed this period
Equivalent Units
% completed this period
Equivalent Units
Total
500
100%
500
60%
300
Total EUP
1,100
900
820
STEP 3
Cost per Equivalent Units AND Cost to be accounted for
Materials
Conversion Cost
TOTAL
Cost incurred in Current Period
$4,680.00
$19,844.00
$ 24,524.00
Total Equivalent Units
900.00
820.00
Cost per Equivalent Units
$ 5.20
$ 24.20
Cost of Beginning WIP
$ 1,300.00
$ 4,760.00
$ 6,060.00
Total cost to be accounted for
$ 30,584.00
STEP 4
Cost report [Including Reconciliation]
Cost of
Units Transferred
600.00
units
Equivalent Units [Step 2]
Cost per Equivalent Units [Step 3]
Cost of Units Transferred
TOTAL
A
From Beginning WIP:
Materials
-
$ 5.20
$ -
Conversion costs
120
$ 24.20
$ 2,904.00
$ 2,904.00
B
From units started & completed
Materials
400
$ 5.20
$ 2,080.00
Conversion Costs
400
$ 24.20
$ 9,680.00
$ 11,760.00
C=A+B
Total
$ 14,664.00
D
Cost of Beginning WIP
$ 6,060.00
E=C+D
Total Cost of Units transferred
$20,724.00
Cost of
Ending WIP
500.00
units
Equivalent Units [Step 2]
Cost per Equivalent Units [Step 3]
Cost of Ending WIP
TOTAL
F
Materials
500
$ 5.20
$ 2,600.00
G
Conversion Costs
300
$ 24.20
$ 7,260.00
H = F + G
Total Cost of Ending WIP
$ 9,860.00
I = E + H
Total Cost accounted for
$ 30,584.00
J
Rounding Off Differences
$ -
K = I + J
Total cost to be accounted for [equals to computed in STEP 3]
$ 30,584.00
Material
Conversion Cost
The equivalent Units of Service (production)
900
820
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