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Equivalent Units

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Superior Lighting, 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. Superior uses process costing and had the following unit production information available for the monts of June and July:
June July
Number of lamps in beginning work in process 850 1,200
Lamps transferred to finished goods 3,500 3,300
Number of lamps in ending work in process 1,200 900

In June, the lamps in beginning work in process were approximately 80 percent complete, while those in ending work in process were only 30 percent complete. In July, the units remaining in ending work in process were 60 percent complete. all lamps in ending work in process are finished during the next month.

a.
For the month of June, calculate the equivalent units produced for the three major cost categories- body material, wiring materials, and labor and overhead.

b.
For the month of July, calculate the equivalent units produced for the three major cost categories - body materials, wiring materials, and labor and overhead.

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The solution explains how to calculate equivalent units of production.

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