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
2
Applications in process on September 1, 100 Applications started in September, 1,000
Completed applications during September, 800
Applications still in process at September 30 were 100% complete as to materials (forms) and 60% complete as to conversion costs.
Beginning WIP
$1,100 4.660
$4,730
Direct materials Conversion costs
September costs
Direct materials
12.610
8.308
4.
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.
Part 1
Determine the equivalent units of service (production) for materials and conversion costs.
Materials
Conversion Costs
The equivalent units of service (production)
10% score reduction after attempt 2
Part 2
Compute the unit cost. (Round unit costs to 2 decimal places, eg. 2.25.)