No beginning stock. (25 minutes) Europe Electronics, SNC manufactures microchips in large quantities. Each microchip undergoes assembly and testing. The total assembly costs during January 1999 were  lo1

REQUIRED 1. Assume there was no beginning stock on 1 January 1999. During January, 10,000 microchips were placed into production and all 10,000 microchips were fully completed at the end of January. What is the unit cost of an assembled microchip in January 1999?
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 1999, 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 equivalent 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 1999?
3. Explain the difference in your answers to requirements 1 and 2.

Transcribed Image Text:

Direct materials used Conversion costs Total manufacturing costs EUR 720,000 760,000 EUR 1,480,000