Chapter 3, Problem 3.16E

Compute equivalent units, unit costs, and costs assigned. (10 5), AP

Using the data in E3-15, assume Santana Mortgage Company uses the FIFO method. Also, assume chat the applications in process on September 1 were 100% complete as to materials (forms) and 40% complete as to conversion costs. Assume overhead costs were $9,620 instead of $9,520.

Instructions

(a) Determine the equivalent units of service (production) for materials and conversion costs.

(b) Compute the unit costs and prepare a cost reconciliation schedule.

E3-15 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.

Determine  equivalent units, unit costs, and assignment of costs. (LO 3, 4), AP

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.

Instructions

(a) Determine the equivalent units of service (production) for materials and conversion costs.

(b) Compute the unit costs and prepare a cost reconciliation schedule.