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.