Question

The cutting department of Cassel Company has the following production and cost data for July
1	Transferred out 14,100 units	Beginning work in process	$0
2	Started 5,100 units that are 60% complete as to conversion costs and 100% complete as to materials at July 31.	Materials	74,304
		Labor	30,000
		Manufacturing overhead	21,300
	Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.
	Compute unit costs and cost reconciliation schedule

Answer 1

1
	Materials	Conversion Costs
Total Equivalent units of production	19200	17160
2
	Materials	Conversion Costs
Unit costs	3.87	2.99
3
Cost reconciliation
Costs accounted for
Transferred out		96726	=14100*6.86
Work in process, July 31
Materials	19737		=5100*3.87
Conversion costs	9149	28886	=3060*2.99
Total costs		125612
Workings:
		Equivalent Units
	Physical Units	Materials	Conversion Costs
Units to be accounted for
Work in process, July 1	0
Started into production	19200
Total units	19200
Units accounted for
Transferred out	14100	14100	14100
Work in process, July 31	5100	5100	3060
Total units	19200	19200	17160
		Materials	Conversion Costs	Total
Unit costs:
Costs in July		74304	51300	125604
Equivalent units		19200	17160
Unit costs		3.87	2.99	6.86