Panoramic Panoramic, Inc. is a digital camera manufacturer. It has two departments: assembly and testing. In January 2017, the company directly supplies materials and $785,000 on conversion costs, with a total production cost of $1,510,000.

Requirement 1. 

Assume there is no starting inventory on January 1, 2017. 10,000 cameras were put into production during January, and all 10,000 cameras completely completed at the end of the month. What is the unit cost of a camera installed in January? (Round your answers to the nearest penny.)

Requirement 2. 

During the month of February 10,000 cameras were put into production. Let's also assume that the same total installation costs for January were made in February, but 8,000 cameras were fully completed at the end of the month. All direct materials have been added to the remaining 2,000 cameras. However, these remaining 2,000 cameras are only 60% on average.

(a) What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit for February? 

(b) What is the unit cost of a camera installed in February?

Requirement 3. 

Explain the difference between your answers to Requirements 1 and 2.

Answer rating: 100% (QA)

SOLUTION Requirement 1 The unit cost of a camera produced in January can be calculated as follows Total production cost in January Direct materials Di... View the full answer