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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. Applications in process on Beginning WIP:September 1, 100 Direct materials $ 1,0002. Applications started in Conversion costs 4,000September, 900 September costs:3. Completed applications during Direct materials $ 4,000September, 800 Direct labor 12,0004. Applications still in process at Overhead 9,400September 30 were 100%complete as to materials (forms)and 60% complete as to conversioncosts.
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.
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