1. Assume there was no beginning inventory of any kind on January 1, 2017. During January, 5,000 cam- eras were placed into production and all 5,000 were fully completed at the end of the month. What is the unit cost of an assembled camera in January? 2. Assume that during February 5,000 cameras are placed into production. Further assume the same total assembly costs for January are also incurred in February, but only 4,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 1,000 cameras. However, on average, these remaining 1,000 cameras are only 60% complete as to conversion costs. (a) What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit for February? (b) What is the unit cost of an assembled camera in February 2017? 3. Explain the difference in your answers to requirements 1 and 2. Required

1. Assume there was no beginning inventory of any kind on January 1, 2017. During January, 5,000 cam- eras were placed into production and all 5,000 were fully completed at the end of the month. What is the unit cost of an assembled camera in January? 2. Assume that during February 5,000 cameras are placed into production. Further assume the same total assembly costs for January are also incurred in February, but only 4,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 1,000 cameras. However, on average, these remaining 1,000 cameras are only 60% complete as to conversion costs. (a) What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit for February? (b) What is the unit cost of an assembled camera in February 2017? 3. Explain the difference in your answers to requirements 1 and 2. Required

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Equivalent units, zero beginning inventory. Candid, Inc. is a manufacturer of digital cameras. It has two departments: assembly and testing. In January 2017, the company incurred $800,000 on direct materials and $805,000 on conversion costs, for a total manufacturing cost of $1,605,000.

1. Assume there was no beginning inventory of any kind on January 1, 2017. During January, 5,000 cam-
eras were placed into production and all 5,000 were fully completed at the end of the month. What is
the unit cost of an assembled camera in January?
2. Assume that during February 5,000 cameras are placed into production. Further assume the same total
assembly costs for January are also incurred in February, but only 4,000 cameras are fully completed
at the end of the month. All direct materials have been added to the remaining 1,000 cameras. However,
on average, these remaining 1,000 cameras are only 60% complete as to conversion costs. (a) What are
the equivalent units for direct materials and conversion costs and their respective costs per equivalent
unit for February? (b) What is the unit cost of an assembled camera in February 2017?
3. Explain the difference in your answers to requirements 1 and 2.
Required

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

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