Question

Assume that during February 5 comma 000 cameras are placed into production. Further assume the same total assembly costs for January are also incurred in​ February, but only 4 comma 000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 1 comma 000 cameras.​ However, on​ average, these remaining 1 comma 000 cameras are only 75​% 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​? ​(a) What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit for​ February? First calculate the equivalent units. Equivalent Units Direct Materials Conversion Costs Completed and transferred out in current period Work in process, ending Work done in current period Now calculate the direct materials and conversion costs per equivalent unit for February. ​(Round your answers to the nearest​ cent.) Direct Materials Conversion Costs Costs incurred during the period Equivalent units of work done in current period Cost per equivalent unit

Answer 1

Answer:-

Equivalent units for direct material are 5,000 because all the material required for 5,000 units is added.
Equivalent units for direct labor is 4,750 because 4,000 are completed and 75% of remaining 1,000 units is completed. 4,000 units + (75% X 1,000 units) = 4,750
Direct material cost per unit = Direct material cost / Equivalent units
= $800,000 / 5,000 units
= $160 direct material cost per unit (A)
Direct labor cost per unit = Direct labor cost / Equivalent units
= $805,000 / 4,600 units
= $168.42 direct labour cost per unit (B)
(A) + (B) = $160 + $168.42 = $328.42
$328.42 is the unit cost of assembling camera.