QUESTION D: Cost per equivalent unit

The Zygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Zygon's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $895,000, while conversion costs equaled $4,225,000. Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed. Hints:

• Note the 4 figures relating to $ amounts always included in a process costing question.
• Some of the WIP units figures are not given. Draw a T account and fill in the missing numbers
• DM are added at the beginning of production. You arent given DM % completion but you should be able to figure them out given the information.

Ending inventory was 50% complete as to conversion costs.

Required:

1. What is the cost per equivalent unit for direct materials for June?
2. What is the cost per equivalent unit for conversion costs for June?
3. What is the total cost recorded in work in process inventory at the end of June?

STEP 1: Units to be accounted for: (Hint: use the WIP (units) from the T account described in the question on page 1 of the assignment)	Quantity Schedule	Production report
Work in process, beginning
Started into production
Total units
		Equivalent units
Units accounted for:		Materials	Conversion
STEP 2: Cost to be accounted for: (Hint: for weighted average, every question must have these four amounts in dollars)	Total Prod. Costs	Total costs
		Materials	Conversion
Total cost (a)
Equivalent units of production (b) (Step 1 above)
Cost per equivalent unit (a / b)
STEP 3: Cost Reconciliation		Equivalent units
		Materials	Conversion
(Hint: for weighted average, = number of units completed x the total cost per equivalent unit)
Total cost of goods completed
(one line each for DM and CC. Use EU from part 1 and cost per EU in part 2)
Total ending work in process
Total cost