Question

Exercise 16-6 The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs 1. Transferred out 13,000 units. Beginning work in process $0 2. Started 4,300 units that are 60% Materials 70,411 complete as to conversion Labor 17,517 costs and 100% complete as Manufacturing overhead 21,900 to materials at July 31. Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process. Determine the equivalent units of production for (1) materials and (2) conversion costs. Materials Conversion Costs Total equivalent units of production Compute unit costs. (Round unit costs to 2 decimal places, e.g. 2.25.) Materials $ Conversion costs $ Prepare a cost reconciliation schedule. (Round unit costs to 2 decimal places, e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.) Cost Reconciliation Costs accounted for    Transferred out $    Work in process, July 31       Materials $       Conversion costs          Total costs $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer a:

Determination of the equivalent units of production for materials and conversion costs..

Particulars	Materials	Conversion Costs
Units transferred out	13,000 units	13,000 units
Work in process, July 31 : 4,300 units * 100 % 4,300 units * 60 %	4,300 units	2,580 units
Total equivalent units	17,300 units	15,580 units

Answer b : Computation of unit costs.

	Working
Materials	($70,411 / 17,300 units)	$4.07
Conversion Costs	[($17,517 + $21,900) / 15,580 units]	$2.53

Answer c: Cost reconciliation schedule.

Cost Reconciliation
Costs accounted for -
Transferred out [13,000 units. * ($4.07 + $2.53)]		$85,800
Work in process, July 31
Materials (4,300 units. * $4.07)	$17,501
Conversion costs (2,580 units. * $2.53)	$6,527	$24,028
Total costs		$109,828