Santana Mortgage Company uses a process costing system to ac

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, 130 2. Applications started in September, 980 3. Completed applications during September, 750 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 $1,170 Conversion costs 4,860 September costs: Direct materials $4,733 Direct labor 13,000 Overhead 9,174 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. Materials Conversion Costs The equivalent units of service (production) LINK TO TEXT LINK TO TEXT Compute the unit costs. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials Conversion Costs Unit costs $ $ LINK TO TEXT LINK TO TEXT 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: Applications completed: Work in process, September 1 $ Conversion costs $ Started and completed $ Work in process, September 30: Materials Conversion costs Total costs $ Click if you would like to Show Work for this question: Open Show Work

Solution

Materials Conversion Costs Units Work Done Equivalent Units Units Work Done Equivalent Units Beginning WIP: 150 0% 0 150 60% 90 Applications started and completed during September 500 100% 500 500 100% 500 Closing WIP 400 100% 400 400 60% 240 The equivalent units of service (production) 900 830 Materials Conversion Costs Incurred during September $4,311 $20,551 Equivalent Units Produced 900 830 Unit Costs $4.79 $24.76 Costs accounted for: Applications completed:      Work in process, September 1 $5,570      Conversion costs $2,228.40 $7,798.40      Started and completed $14,775 $22,573.40 Work in process, September 30:      Materials $1,916      Conversion costs $5,942.40 $7,858.40 Total Costs $30,431.80