Equivalent units: No beginning inventory. International Electronics manufactures micro¬

chips in large quantities. Each microchip undergoes assembly and testing. The total assembly costs during January 2007 were Direct materials used $ 740,000 Conversion costs 780,000 Total manufacturing costs $1,520,000 700 Required 1. Assume there was no beginning inventory on January 1, 2007. During January, 10,000 microchips were placed into production and all 10,000 microchips were fully completed at the end ofJanuary. What is the unit cost of an assembled microchip in January 2007?

2. Assume that during February 10,000 microchips were placed into production. Further assume the same total assembly costs for January are also incurred in February 2007, but only 9,000 microchips are fully completed at the end of February. All direct materials had been added to the remaining 1,000 microchips. However, on average, these remaining 1,000 microchips were only 50% complete as to conversion costs,

(a) What are the equiva¬

lent units for direct materials and conversion costs and their respective equivalent unit costs for February?

(b) What is the unit cost of an assembled microchip in February 2007?

3. Explain the difference in your answers to requirements 1 and 2.