Number 3City University uses a process cost system to accumulate costs incurred in handling studentapplications in the admissions department. When an application is completed, it is forwarded tothe appropriate academic department for final processing. The following processing and costdata pertain to March.1.Applications in process on March 1Applications started in MarchCompleted applications during MarchApplications still in process at March 31were 100% complete as to materials (forms)and 75% complete as to conversion costs.2502.1,1009503.4.000002000000Beginning WIP:Direct materialsConversion costs$ 2,1259,450AstMarch costs:Direct materials$ 8,00043,00010,050Direct laborOverheadMaterials are the forms used in the application process, and these costs are incurred at thebeginning of the process. Conversion costs are incurred uniformly during the process.InstructionsDi(a)$150000Determine the equivalent units of service (production) for materials and conversioncosts.hours75Compute the unit costs and prepare a cost reconciliation sched ule.(b)S1In an effort to improve efficiency, City University has changed their admissionsprocedures. Instead of adding all of the materials at the beginning of the process,they have decided to add half of the materials at the end of the process right beforethe applications are transferred to the academic departments. This has resulted in$2,000 savings in March's direct materials costs (beginning direct materialsnot affected). Determine the equivalent units of service (production) and the costper equivalent unit for materials based on this change. If City University processes12,000 applications during a typical year, what is the total dollar amount of savingsthat will result from this change?(c)Note: Round all calculations to the nearest penny.

Question
Asked Oct 30, 2019
Number 3
City University uses a process cost system to accumulate costs incurred in handling student
applications in the admissions department. When an application is completed, it is forwarded to
the appropriate academic department for final processing. The following processing and cost
data pertain to March.
1.
Applications in process on March 1
Applications started in March
Completed applications during March
Applications still in process at March 31
were 100% complete as to materials (forms)
and 75% complete as to conversion costs.
250
2.
1,100
950
3.
4.
00000
2000
000
Beginning WIP:
Direct materials
Conversion costs
$ 2,125
9,450
Ast
March costs:
Direct materials
$ 8,000
43,000
10,050
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.
InstructionsDi
(a)
$150000
Determine the equivalent units of service (production) for materials and conversion
costs.
hours
75
Compute the unit costs and prepare a cost reconciliation sched ule.
(b)
S1
In an effort to improve efficiency, City University has changed their admissions
procedures. Instead of adding all of the materials at the beginning of the process,
they have decided to add half of the materials at the end of the process right before
the applications are transferred to the academic departments. This has resulted in
$2,000 savings in March's direct materials costs (beginning direct materials
not affected). Determine the equivalent units of service (production) and the cost
per equivalent unit for materials based on this change. If City University processes
12,000 applications during a typical year, what is the total dollar amount of savings
that will result from this change?
(c)
Note: Round all calculations to the nearest penny.
help_outline

Image Transcriptionclose

Number 3 City University uses a process cost system to accumulate costs incurred in handling student applications in the admissions department. When an application is completed, it is forwarded to the appropriate academic department for final processing. The following processing and cost data pertain to March. 1. Applications in process on March 1 Applications started in March Completed applications during March Applications still in process at March 31 were 100% complete as to materials (forms) and 75% complete as to conversion costs. 250 2. 1,100 950 3. 4. 00000 2000 000 Beginning WIP: Direct materials Conversion costs $ 2,125 9,450 Ast March costs: Direct materials $ 8,000 43,000 10,050 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. InstructionsDi (a) $150000 Determine the equivalent units of service (production) for materials and conversion costs. hours 75 Compute the unit costs and prepare a cost reconciliation sched ule. (b) S1 In an effort to improve efficiency, City University has changed their admissions procedures. Instead of adding all of the materials at the beginning of the process, they have decided to add half of the materials at the end of the process right before the applications are transferred to the academic departments. This has resulted in $2,000 savings in March's direct materials costs (beginning direct materials not affected). Determine the equivalent units of service (production) and the cost per equivalent unit for materials based on this change. If City University processes 12,000 applications during a typical year, what is the total dollar amount of savings that will result from this change? (c) Note: Round all calculations to the nearest penny.

fullscreen
check_circle

Expert Answer

Step 1

a. Compute the equivalent units of service for material and conversion costs:

Material Cost
Conversion
Equiva lent Units:
Units started and completed
Add: Ending Work in Process
Total Percentage Units
100%
100%
Total Percentage
Units
100%
75%
(400x75%
950
950
400
300
Total Equivalent units
1,350
1,250
help_outline

Image Transcriptionclose

Material Cost Conversion Equiva lent Units: Units started and completed Add: Ending Work in Process Total Percentage Units 100% 100% Total Percentage Units 100% 75% (400x75% 950 950 400 300 Total Equivalent units 1,350 1,250

fullscreen
Step 2

Workings:

Particulars
Units
Beginning Work in Process units
Add: Units Started in Process
Total Units to account for
250
1,100
1,350
Computation of Ending working in process:
Units started and completed (a)
Ending Work in Process (a-b)
Total Units to be accounted for (b)
950
400
1,350
help_outline

Image Transcriptionclose

Particulars Units Beginning Work in Process units Add: Units Started in Process Total Units to account for 250 1,100 1,350 Computation of Ending working in process: Units started and completed (a) Ending Work in Process (a-b) Total Units to be accounted for (b) 950 400 1,350

fullscreen
Step 3

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

Com...

Material
Particulars
Conversion
Cost
Beginning work in Process
Add: Cost Added during May
Total
Total Cost to account for
$ 2,125
S 8.000
$ 10,125
$72,625 (10,125+62,500)
$9,450
$ 53.050
$ 62,500
help_outline

Image Transcriptionclose

Material Particulars Conversion Cost Beginning work in Process Add: Cost Added during May Total Total Cost to account for $ 2,125 S 8.000 $ 10,125 $72,625 (10,125+62,500) $9,450 $ 53.050 $ 62,500

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Accounting

Related Accounting Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Break-Even Point Radison Inc. sells a product for $64 per unit. The variable cost is $38 per unit, w...

A: Click to see the answer

question_answer

Q: At the end of the current year. Accounts Receivable has a balance of $4,375,000; Allowance for Doubt...

A: Accounts receivable is the sum owed to an organization in lieu of the products or services provided ...

question_answer

Q: Income StatementThe revenues and expenses of Sentinel Travel Service for the year ended August 31, 2...

A: Prepare an income statement:

question_answer

Q: 1-2 Please state what financial statement(s) the following accounts go on 1) Net income 2) End of-pe...

A: Financial statements: Financial statements are condensed summary of transactions communicated in the...

question_answer

Q: Recording Purchases and Shipping Terms On May 12, Digital Distributors received three shipments of m...

A: Click to see the answer

question_answer

Q: Problem 8-06A On January 1, 2022, Whispering Winds Corp. had Accounts Receivable of $52,500 and All...

A: Accounts receivable:Accounts receivable refers to the amounts to be received within a short period f...

question_answer

Q: Scott Incorporated has been in business for several months. Because of increased competition in the ...

A: Break-Even Point: A break-even point is a production level of a company where their revenue equals t...

question_answer

Q: Habicht company was formed in 2018 to produce a single product. The production and sales for the nex...

A: a. Compute gross profit under FIFO method for four years as shown below:

question_answer

Q: One Trick Pony (OTP) incorporated and began operations near the end of the year, resulting in the fo...

A: Prepare journal entry: