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Nihon, Inc. is a manufacturer of digital cameras. It has twodepartments: assembly and testing. In January 2017, the company incurred $850,000 on direct materials and $820,000 on conversioncosts, for a total manufacturing cost of $1,670,000.

Requirement 1.

Assume there was no beginning inventory of any kind on January1, 2017. DuringJanuary, 10,000 cameras were placed into production and all 10,000 were fully completed at the end of the month. What is the unit cost of an assembled camera inJanuary?

Requirement 2.

Assume that during February 10,000 cameras are placed into production. Further, assume the same total assembly costs for January are also incurred inFebruary, but only 8,000 cameras are fully completed at the end of the month. All direct materials have been added to the remaining 2,000 cameras.However, onaverage, these remaining 2,000 cameras are only 75% complete as to conversion costs.(a) What are the equivalent units for direct materials and conversion costs and their respective costs per equivalent unit forFebruary? (b) What is the unit cost of an assembled camera in February 2017?

Requirement 3.

Explain the difference in your answers to requirements 1 and 2.

36.The cost components of a heater include $41 for thecompressor, $16 for the sheet molded compoundframe, and $78 per unit for assembly. The factory machines and tools cost is $58,500. The company expects to produce 1,500 heaters in the coming year. What cost function best represents thesecosts?

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