Number 3 City University uses a process cost system to accumulate costs incurred in handling student applications in the admissions department. When an application is completed, it is forwarded to the appropriate academic department for final processing. The following processing and cost data pertain to March. 1. Applications in process on March 1 Applications started in March Completed applications during March Applications still in process at March 31 were 100% complete as to materials (forms) and 75% complete as to conversion costs. 250 2. 1,100 950 3. 4. 00000 2000 000 Beginning WIP: Direct materials Conversion costs $ 2,125 9,450 Ast March costs: Direct materials $ 8,000 43,000 10,050 Direct labor Overhead 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. InstructionsDi (a) $150000 Determine the equivalent units of service (production) for materials and conversion costs. hours 75 Compute the unit costs and prepare a cost reconciliation sched ule. (b) S1 In an effort to improve efficiency, City University has changed their admissions procedures. Instead of adding all of the materials at the beginning of the process, they have decided to add half of the materials at the end of the process right before the applications are transferred to the academic departments. This has resulted in $2,000 savings in March's direct materials costs (beginning direct materials not affected). Determine the equivalent units of service (production) and the cost per equivalent unit for materials based on this change. If City University processes 12,000 applications during a typical year, what is the total dollar amount of savings that will result from this change? (c) Note: Round all calculations to the nearest penny.
Number 3 City University uses a process cost system to accumulate costs incurred in handling student applications in the admissions department. When an application is completed, it is forwarded to the appropriate academic department for final processing. The following processing and cost data pertain to March. 1. Applications in process on March 1 Applications started in March Completed applications during March Applications still in process at March 31 were 100% complete as to materials (forms) and 75% complete as to conversion costs. 250 2. 1,100 950 3. 4. 00000 2000 000 Beginning WIP: Direct materials Conversion costs $ 2,125 9,450 Ast March costs: Direct materials $ 8,000 43,000 10,050 Direct labor Overhead 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. InstructionsDi (a) $150000 Determine the equivalent units of service (production) for materials and conversion costs. hours 75 Compute the unit costs and prepare a cost reconciliation sched ule. (b) S1 In an effort to improve efficiency, City University has changed their admissions procedures. Instead of adding all of the materials at the beginning of the process, they have decided to add half of the materials at the end of the process right before the applications are transferred to the academic departments. This has resulted in $2,000 savings in March's direct materials costs (beginning direct materials not affected). Determine the equivalent units of service (production) and the cost per equivalent unit for materials based on this change. If City University processes 12,000 applications during a typical year, what is the total dollar amount of savings that will result from this change? (c) Note: Round all calculations to the nearest penny.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Number 3
City University uses a process cost system to accumulate costs incurred in handling student
applications in the admissions department. When an application is completed, it is forwarded to
the appropriate academic department for final processing. The following processing and cost
data pertain to March.
1.
Applications in process on March 1
Applications started in March
Completed applications during March
Applications still in process at March 31
were 100% complete as to materials (forms)
and 75% complete as to conversion costs.
250
2.
1,100
950
3.
4.
00000
2000
000
Beginning WIP:
Direct materials
Conversion costs
$ 2,125
9,450
Ast
March costs:
Direct materials
$ 8,000
43,000
10,050
Direct labor
Overhead
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.
InstructionsDi
(a)
$150000
Determine the equivalent units of service (production) for materials and conversion
costs.
hours
75
Compute the unit costs and prepare a cost reconciliation sched ule.
(b)
S1
In an effort to improve efficiency, City University has changed their admissions
procedures. Instead of adding all of the materials at the beginning of the process,
they have decided to add half of the materials at the end of the process right before
the applications are transferred to the academic departments. This has resulted in
$2,000 savings in March's direct materials costs (beginning direct materials
not affected). Determine the equivalent units of service (production) and the cost
per equivalent unit for materials based on this change. If City University processes
12,000 applications during a typical year, what is the total dollar amount of savings
that will result from this change?
(c)
Note: Round all calculations to the nearest penny.
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