Santana Mortgage Company uses a process cost system to accum

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.

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.

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

1.		Applications in process on September 1, 170
2.		Applications started in September, 930
3.		Completed applications during September, 660
4.		Applications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs.

Solution

Total Costs to account for Cost of beginning applications in process (1310+4140)        5,450.00 Costs incurred this period(5114+12820+7581)      25,515.00 Total Costs to account for      30,965.00 Total costs accounted for ( from below table)      30,965.00 Unit Reconciliation Units to account for Beginning applications in process            170.00 Units started            930.00 Total units to account for (170+930)        1,100.00 Total Units accounted for Units completed and transferred out bal.fig (1100-660)            440.00 Ending applications in process            660.00 Total units accounted for( from above calculated)        1,100.00 Equivalent units of production (EUP) - Weighted Average Method Units(a) % of Materials(b) EUP - Materials(a*b) % of Conversion( c) EUP - Conversion(a*c) Units Completed and transferred out            440.00 100.00%                              440.00 100.00%                                 440.00 Ending applications in process            660.00 100.00%                              660.00 60.00%                                 396.00 Total units        1,100.00                           1,100.00                                 836.00 Cost per equivalent unit of production Costs of beginning applications in process                           1,310.00                              4,140.00 Cost incurred during the period(12820+7581)                           5,114.00                           20,401.00 Total Costs Costs                           6,424.00 Costs                           24,541.00 Equivalent units of production Units                           1,100.00 Units                                 836.00 Cost per equivalent unit of production/(6424/1100) & (24541/836)                                   5.84                                    29.36 Total Costs accounted for Cost of units transferred out EUP(a) Cost per EUP(b) Total Cost(a*b) Direct Materials            440.00                            5.84                           2,569.60 Conversion            440.00                          29.36                        12,916.32 Total Costs transferred out                    15,485.92 Work in process, september 30 EUP(a) Cost per EUP(b) Total Cost(a*b) Direct Materials            660.00                            5.84                           3,854.40 Conversion            396.00                          29.36                        11,624.68 Total cost of ending work in progress                    15,479.08 Total costs accounted for                    30,965.00