Question 5 Hi-Tech Mortgage Company uses a process costing system to accumulate costs in its loan 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. $1,010 4,130 2. Applications in process on September 1, 120 Applications started in September, 1,150 Completed applications during September, 910 Applications still in process at September 30 were 100% complete in terms of materials (forms) and 60% complete terms of conversion costs. Beginning work process: Direct materials Conversion costs September costs: Direct materials Direct labour Overhead 3. 55,340 11,800 11,094 4 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. Conversion Costs Materials Total equivalent units 1270 1126 SHOW SOLUTION LINK TO TEXT LINK TO TEXT (b) Calculate the unit costs and prepare a cost reconciliation schedule. Conversion Costs Costs Materials Total Unit costs Costs in September $ $ Equivalent units Unit costs 4 $ Costs to be accounted for Work in process, September 1 Started into production Total costs Cost Reconciliation Schedule Costs accounted for Transferred out Work in process, September 30 Materials Conversion costs Total costs