Question

Brite ldeas, Inc., mass-produces reading lamps. Materials used in constructing the body of the lamp are added at the start of the process, while the materials used in wiring the lamps are added at the halfway point. All labor and overhead are added evenly throughout the manufacturing process. Brite Ideas uses process costing and had the following unit production information available for the months of June and Julv June Jul Number of lamps in beginning work in process Lamps transferred to finished goods Number of lamps in ending work in process 870 1,200 3,000 3,520 800 1,200 In June, the lamps in beginning work in process were approximately 70 percent complete, while those in ending work in process were only 40 percent complete. In July, the units remaining in ending work in process were 90 percent complete. All lamps in ending work in process are finished during the next month Required a. For the month of June, calculate the equivalent units of production for the three major cost categories-body materials, wiring materials, and labor and overhead b. For the month of July, calculate the equivalent units of production for the three major cost categories-body materials, wiring materials, and labor and overhead Equivalent Units Cost Categories a. June Body materials Wiring materials Labor & Overhead b. July Body materials Wiring materials Labor & Overhead

Explanations for each answer is appreciated.

Answer 1

Ans-a- Statement of Equivalent Units

For the Month of June

Particulars	Input	Particulars	Output	Body Materials		Wiring Materials		Labor & Overhead
				%	E.U.	%	E.U.	%	E.U.
			(a)	(b)	(a)* (b)	(c)	(a)* (c)	(d)	(a)*(d)
Beginning Inventory	870	Units Completed	3,000	100%	3,000	100%	3,000	100%	3,000
Units Introduced	3,330	Ending Inventory	1,200	100%	1,200	100%	1,200	40%	480
Total	4,200		4,200		4,200		4,200		3,480

b-Statement of Equivalent Units

For the Month of July

Particulars	Input	Particulars	Output	Body Materials		Wiring Materials		Labor & Overhead
				%	E.U.	%	E.U.	%	E.U.
			(a)	(b)	(a)* (b)	(c)	(a)* (c)	(d)	(a)*(d)
Beginning Inventory	1,200	Units Completed	3,520	100%	3,520	100%	3,520	100%	3,520
Units Introduced	3,120	Ending Inventory	800	100%	800	100%	800	90%	720
Total	4,320		4,320		4,320		4,320		4,240

Representation in tabular form:-

Cost Categories	Equivalent Units
June:-
Body Materials	4,200
Wiring Materials	4,200
Labor & Overhead	3,480
July:-
Body Materials	4,320
Wiring Materials	4,320
Labor & Overhead	4,240

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