Question

Galaxy Quest produces telescopes in a single processing department. All direct materials used in the production of telescopes are added at the beginning of the process. Conversion costs (labor and overhead) are incurred evenly thereafter, as each unit is assembled, adjusted, and tested. The company uses process costing and has provided the following production information for January and February. Jan. Feb. Number of units in beginning work in process inventory 0 100 Number of units started during the month 900 600 Total number of units transferred to finished goods 800 500 The units remaining in work in process at the end of January were approximately 70 percent complete with respect to their conversion costs. During the month of February, all of the beginning work in process units were completed and the units remaining in work in process at the end of the month were approximately 75 percent complete with respect to their conversion costs. a. For the month of January, calculate the equivalent units of input resources used for direct materials and conversion. b. For the month of February, calculate the equivalent units of input resources used for direct materials and conversion.

Answer 1

a) The calculation of the equivalent units of input resources used for direct materials and conversion for January in Galaxy Quest is as follows:

                                                  Direct Materials     Conversion

Total equivalent units for January     900                    870

b) The calculation of the equivalent units of input resources used for direct materials and conversion for February in Galaxy Quest is as follows:

                                                   Direct Materials     Conversion

Total equivalent units for February    700                   650

What is the equivalent unit of production?

The equivalent unit of production is an estimate of the units produced during an accounting period based on the percentage or degree of completion.

Using the weighted-average method, the equivalent units of production can be calculated as below.

However, another method for calculating the equivalent unit of production is the FIFO method.  Under the FIFO method, the level of completion done on the beginning inventory in the current period is considered, unlike under the weighted-average method.

Production Data and Calculations:

                                                                                             Jan.    Feb.

Number of units in beginning work in process inventory   0       100

The number of units started during the month                900     600

Total units available for processing                                  900     700

Total number of units transferred to finished goods       800    500

Number of units in ending work in process inventory     100    200

Equivalent units of production for January:

                                       Units      Direct Materials     Conversion

Units completed             800              800 (100%)         800 (100%)

Ending inventory             100               100 (100%)           70 (70%)

Total equivalent units for January     900                    870

Equivalent units of production for February:

                                       Units      Direct Materials     Conversion

Units completed             500              500 (100%)         500 (100%)

Ending inventory            200              200 (100%)          150 (75%)

Total equivalent units for February    700                   650

Learn more about equivalent units of production at brainly.com/question/16259709