MasterCom Corporation corporation produces a semiconductor chip used on communications. the direct materials are added at hte start of the production process while conversion costs are added uniformly throughout the production process. big band had no inventory at the start of june. during the month it incurred direct material cost of $935,750 and conversion costs of $4,554,000. big band started 475,000 chips and completed 425,000 of them in june. ending inventory was 50% complete as to conversion costs.

Compute :

a. The equivalent units of work done in June.

b. The total manufacturing cost per chip. Allocate the total costs between the completed chips and those in ending inventory.

Question

Zachariah Booker

Business

25 August, 16:59

MasterCom Corporation corporation produces a semiconductor chip used on communications. the direct materials are added at hte start of the production process while conversion costs are added uniformly throughout the production process. big band had no inventory at the start of june. during the month it incurred direct material cost of $935,750 and conversion costs of $4,554,000. big band started 475,000 chips and completed 425,000 of them in june. ending inventory was 50% complete as to conversion costs.

Compute :

a. The equivalent units of work done in June.

b. The total manufacturing cost per chip. Allocate the total costs between the completed chips and those in ending inventory.

+2

Answers (1)

Know the Answer?

Tristan Holder · Answer 1

a. The equivalent units of work done in June = 450,000

b. The total manufacturing cost per chip = $ 12.199 = $ 12.2

Explanation:

a. The equivalent units of work done in June

Units Started 475,000

Units Completed 425,000

Units still in Process completed 50% = (50,000 * 50%) 25,000

The equivalent units of work done in June = 450,000

b. The total manufacturing cost per chip

Direct material cost $935,750

Conversion costs $4,554,000

The total manufacturing $ 5489750

The total manufacturing cost per chip = $ 5489750/450,000

The total manufacturing cost per chip = $ 12.199 = $ 12.2