The Bygon Corporation Was Recently Formed to Produce a Semiconductor

question 122

Essay

The Bygon Corporation was recently formed to produce a semiconductor chip that forms an essential part of the cell phone 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 Bygon's first month of operations, and therefore, there was no beginning inventory.Direct materials cost for the month totaled $743,750, while conversion costs equaled $3,403,000.Accounting records indicate that 425,000 chips were started in June and 395,000 chips were completed.Ending inventory was 50% complete as to conversion costs.Required:
a.What is the total manufacturing cost per chip for June?
b.Allocate the total costs between the completed chips and the chips in ending inventory.

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