Garcia Mortgage Company uses a process cost system to accumulate costs in its Application Department. When an
Question:
Garcia 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.
September Transactions
No. | Transactions |
1. | applications in process on September 1 are 100 |
2. | applications started in September are 1,000 |
3. | Completed applications during September are 800 |
4. | Application still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs. |
Production and Manufacturing costs
Production cost information | cost |
beginning WIP: | |
Direct materials | $1,400 |
Conversion costs | $4,250 |
September costs | |
direct materials | $4,760 |
direct labor | $12,680 |
overhead | $8,550 |
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 prcess.
determine the equivalent units of service (production) for materials and conversion costs.
(Hint: calculate ending inventory first)
Responses - Equivalent Units
materials | conversion costs | |
the equivalent units of determine the costs of production. |
(hint: divide costs by the equivalent units calculated.)
round unit costs to 2 decimal places, e.g. 2.25.
Response - Unit Costs
materials | conversion | |
unit costs prepare a cost reconciliation schedule | $ | $ |
(hint: you need to multiply equivalent units for each cost by its unit cost.)
Round your answer to 0 decimal places, e.g. 10,000.
Responses - Manufacturing Costs
Cost Accounted for:
transferred out | $ | |
work in process, September 30 | ||
Materials | $ | |
Conversion Costs | $ | $ |
Total Costs | $ |
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso