Exercise 1615 Part Level Submission Santana Mortgage Company

Exercise 16-15 (Part Level Submission) 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.

Exercise 16-15 (Part Level Submission) 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, 130 2. Applications started in September, 920 3. Completed applications during September, 690 4. Applications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs. Beginning WIP: $1,400 5,020 Direct materials Conversion costs September costs: Direct materials Direct labor Overhead $4,763 12,620 5,970 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. (a) Your answer is correct. Determine the equivalent units of service (production) for materials and conversion costs. Materials Conversion Costs The equivalent units of service (production) 10 90 Click if you would like to Show Work for this question: Open Show Work

Solution

Materials Conversion costs Total costs 6163 23610 Equivalent units 1050 906 Unit costs 5.87 26.06