A company makes telescopes. All direct materials used inthe production of telesc

Question

A company makes telescopes. All direct materials used inthe production of telescopes are added at the beginning of themanufacturing process. Labor and overhead are added evenlythereafter, as each unit is assembled, adjusted, andtested.   The company uses process costing and had thefollowing unit production information available for the months ofJanuary and February:                                                                                                 Jan     Feb Number of units in beginning work in processinventory............   0          50 Number of units started during themonth.................................200        300 Total number of units transferred to finishedgoods................... 150       250 The units in work in process at the end of January wereapproximately 40 percent complete. During the month ofFebruary, all of the beginning work in process units were completedand the units remaining in work in process at the end of the monthwere approximately 75 percent complete. a. for the month of January, calculate the equivalent unitsproduced for each of the two cost categories- direct materialsand labor and overhead A company makes telescopes. All direct materials used inthe production of telescopes are added at the beginning of themanufacturing process. Labor and overhead are added evenlythereafter, as each unit is assembled, adjusted, andtested.   The company uses process costing and had thefollowing unit production information available for the months ofJanuary and February:                                                                                                 Jan     Feb Number of units in beginning work in processinventory............   0          50 Number of units started during themonth.................................200        300 Total number of units transferred to finishedgoods................... 150       250 The units in work in process at the end of January wereapproximately 40 percent complete. During the month ofFebruary, all of the beginning work in process units were completedand the units remaining in work in process at the end of the monthwere approximately 75 percent complete. a. for the month of January, calculate the equivalent unitsproduced for each of the two cost categories- direct materialsand labor and overhead

Explanation / Answer

Statement of Equivalent Units for themonth of January Direct Materials Labor and Overheads Input Output Units % Units % Opening 0 0 0 0 Started 200 150 150 100 150 100 WIP 50 20 40 20 40 Total 200 200 170 170 Statement of Equivalent Units for themonth of January Direct Materials Labor and Overheads Input Output Units % Units % Opening 0 0 0 Started 200 150 150 100 150 100 WIP 50 20 40 20 40 Total 200 200 170 170 The blue color figure represents the equivalentunits produced for two categories viz. Direct materials and labor and overheads. ------------------------------------------------------------------------- Not required Just forInformation
Statement of Equivalent Units for the month of February ------------------------------------------------------------------------- Direct Materials Labor and Overheads Input Output Units % Units % Opening 50 50 50 100 50 100 Started 300 200 200 100 200 100 WIP 100 75 75 75 75 Total 350 350 325 325
The blue color figure represents the equivalent units produced fortwo categories viz. Directmaterials and laborand overheads.

Statement of Equivalent Units for themonth of January Direct Materials Labor and Overheads Input Output Units % Units % Opening 0 0 0 0 Started 200 150 150 100 150 100 WIP 50 20 40 20 40 Total 200 200 170 170 The blue color figure represents the equivalentunits produced for two categories viz. Direct materials and labor and overheads. ------------------------------------------------------------------------- Not required Just forInformation
Statement of Equivalent Units for the month of February Direct Materials Labor and Overheads Input Output Units % Units % Opening 50 50 50 100 50 100 Started 300 200 200 100 200 100 WIP 100 75 75 75 75 Total 350 350 325 325

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