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Costing Project

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A project on costing

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1. IntroductionManufacturing is the production of merchandise for use or sale using labor and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be used for manufacturing other, more complex products, such as aircraft, household appliances or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users the "consumers".

Manufacturing takes turns under all types of economic systems. In a free market economy, manufacturing is usually directed toward the mass production of products for sale to consumers at a profit. In a collectivist economy, manufacturing is more frequently directed by the state to supply a centrally planned economy. In mixed market economies, manufacturing occurs under some degree of government regulation.

Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. Some industries, such as semiconductor and steel manufacturers use the term fabrication instead.

The manufacturing sector is closely connected with engineering and industrial design. Examples of major manufacturers in North America include General Motors Corporation, General Electric, Procter & Gamble, General Dynamics, Boeing, Pfizer, and Precision Castparts. Examples in Europe include Volkswagen Group, Siemens, and Michelin. Examples in Asia include Toyota, Samsung, and Bridgestone.

According to some economists, manufacturing is a wealth-producing sector of an economy, whereas a service sector tends to be wealth-consuming. Emerging technologies have provided some new growth in advanced manufacturing employment opportunities in the Manufacturing Belt in the United States. Manufacturing provides important material support for national infrastructure and for national defense.

On the other hand, most manufacturing may involve significant social and environmental costs. The clean-up costs of hazardous waste, for example, may outweigh the benefits of a product that creates it. Hazardous materials may expose workers to health risks. These costs are now well known and there is effort to address them by improving efficiency, reducing waste, using industrial symbiosis, and eliminating harmful chemicals. The increased use of technologies such as 3D printing also offer the potential to reduce the environmental impact of producing finished goods through distributed manufacturing.

The negative costs of manufacturing can also be addressed legally. Developed countries regulate manufacturing activity with labor laws and environmental laws. Across the globe, manufacturers can be subject to regulations and pollution taxes to offset the environmental costs of manufacturing activities. Labor unions and craft guilds have played a historic role in the negotiation of worker rights and wages. Environment laws and labor protections that are available in developed nations may not be available in the third world.

Tort law and product liability impose additional costs on manufacturing. These are significant dynamics in the on-going process, occurring over the last few decades, of manufacture-based industries relocating operations to "developing-world" economies where the costs of production are significantly lower than in "developed-world" economies.

Process costing is an accounting methodology that traces and accumulates direct costs, and allocates indirect costs of a manufacturing process. Costs are assigned to products, usually in a large batch, which might include an entire month's production. Eventually, costs have to be allocated to individual units of product. It assigns average costs to each unit, and is the opposite extreme of Job costing which attempts to measure individual costs of production of each unit. Process costing is usually a significant chapter. it is a method of assigning costs to units of production in companies producing large quantities of homogeneous products.

Process costing is a type of operation costing which is used to ascertain the cost of a product at each process or stage of manufacture. CIMA defines process costing as "The costing method applicable where goods or services result from a sequence of continuous or repetitive operations or processes. Costs are averaged over the units produced during the period". Process costing is suitable for industries producing homogeneous products and where production is a continuous flow. A process can be referred to as the sub-unit of an organization specifically defined for cost collection purpose.

Costing is an important process that many companies engage in to keep track of where their money is being spent in the production and distribution processes. Understanding these costs is the first step in being able to control them. It is very important that a company chooses the appropriate type of costing system for their product type and industry.

One type of costing system that is used in certain industries is process costing that varies from other types of costing (such as job costing) in some ways. In process costing unit costs are more like averages, the process-costing system requires less bookkeeping than does a job-order costing system. Thus, some companies often prefer to use the process-costing system.

Process costing is appropriate for companies that produce a continuous mass of like units through series of operations or process. Also, when one order does not affect the production process and a standardization of the process and product exists. However, if there are significant differences among the costs of various products, a process costing system would not provide adequate product-cost information. Costing is generally used in such industries such as petroleum, coal mining, chemicals, textiles, paper, plastic, glass, and food.

Sometimes the task of assigning costs to an individual product is simple and cost-effective. Raw materials and labor are relatively easy to track for yacht manufacturers. For such companies, job costing is an efficient cost allocation method. What about a company that produces hundreds of thousands of indistinguishable products? How does a Coke plant determine the cost to produce a single bottle of soda in a way that is not prohibitively time consuming or expensive?

For this type of manufacturer, we use a fundamentally different cost allocation method called process costing. Instead of tracing costs to an individual product, we instead trace costs to a single process and then allocate those costs to all products moving through that process. A Coke plant, for example, might have processes like mixing, bottling, and packaging.

Process costing is accomplished through a series of mathematical steps: Figure out how many units we need to track for the period (includes beginning WIP inventory, units started and finished in the period, and ending WIP inventory). Calculate an important quantity called equivalent units of production, or EUP (this concept will be discussed more thoroughly in the next section). Determine all costs to allocate to units of production for the period. Calculate cost per equivalent unit of production. Separate costs between units completed and units in ending WIP inventory. The final goal is to determine costs to report in ending WIP and goods completed (these are either moved to the next process or sent to Finished Goods Inventory and eventually Cost of Goods Sold). Keep in mind that these steps need to be followed for each process in the manufacturing line of a large factory. We also need to choose how we will handle beginning WIP inventory. There are two assumptions we can use: weighted-average process costing or first-in first-out (FIFO) process costing. For simplicitys sake, we will focus on the less complex weighted-average method in this article.Consider the simple example of a Coke bottling process center that had no beginning or ending WIP inventory. All units started in the period were moved along to the packaging center. In this case, EUP is simply the number of units sent to the packaging center. Unfortunately, the calculation is rarely that easy -- at the beginning and end of a period, some products will be in various stages of completion, so we need a way to account for partially-completed units.

The good news is that equivalent units of production can easily accommodate partially-finished units. We can easily visualize that two half-finished bottles would require the same amount of work as one completed bottle. Process costing calculates cost per equivalent unit instead of just keeping track of finished units to better match costs to products that are constantly moving through the process.

2. Case StudyA light-emitting diode (LED) is a two-lead semiconductor light source. It is a basic pn-junction diode, which emits light when activated. When a fitting voltage is applied to the leads, electrons are able to recombine with electron holes within the device, releasing energy in the form of photons. This effect is called electroluminescence, and the color of the light (corresponding to the energy of the photon) is determined by the energy band gap of the semiconductor.

An LED is often small in area (less than 1 mm2) and integrated optical components may be used to shape its radiation pattern.

Appearing as practical electronic components in 1962, the earliest LEDs emitted low-intensity infrared light. Infrared LEDs are still frequently used as transmitting elements in remote-control circuits, such as those in remote controls for a wide variety of consumer electronics. The first visible-light LEDs were also of low intensity, and limited to red. Modern LEDs are available across the visible, ultraviolet, and infrared wavelengths, with very high brightness.

Early LEDs were often used as indicator lamps for electronic devices, replacing small incandescent bulbs. They were soon packaged into numeric readouts in the form of seven-segment displays, and were commonly seen in digital clocks.

Recent developments in LEDs permit them to be used in environmental and task lighting. LEDs have many advantages over incandescent light sources including lower energy consumption, longer lifetime, improved physical robustness, smaller size, and faster switching. Light-emitting diodes are now used in applications as diverse as aviation lighting, automotive headlamps, advertising, general lighting, traffic signals, and camera flashes. However, LEDs powerful enough for room lighting are still relatively expensive, and require more precise current and heat management than compact fluorescent lamp sources of comparable output.

LEDs have allowed new text, video displays, and sensors to be developed, while their high switching rates are also useful in advanced communications technology.The LED consists of a chip of semiconducting material doped with impurities to create a p-n junction. As in other diodes, current flows easily from the p-side, or anode, to the n-side, or cathode, but not in the reverse direction. Charge-carrierselectrons and holesflow into the junction from electrodes with different voltages. When an electron meets a hole, it falls into a lower energy level and releases energy in the form of a photon.

The wavelength of the light emitted, and thus its color, depends on the band gap energy of the materials forming the p-n junction. In silicon or germanium diodes, the electrons and holes usually recombine by a non-radiative transition, which produces no optical emission, because these are indirect band gap materials. The materials used for the LED have a direct band gap with energies corresponding to near-infrared, visible, or near-ultraviolet light.

LED development began with infrared and red devices made with gallium arsenide. Advances in materials science have enabled making devices with ever-shorter wavelengths, emitting light in a variety of colors.

LEDs are usually built on an n-type substrate, with an electrode attached to the p-type layer deposited on its surface. P-type substrates, while less common, occur as well. Many commercial LEDs, especially GaN/InGaN, also use sapphire substrate.

Most materials used for LED production have very high refractive indices. This means that much light will be reflected back into the material at the material/air surface interface. Thus, light extraction in LEDs is an important aspect of LED production, subject to much research and development.

Solid-state devices such as LEDs are subject to very limited wear and tear if operated at low currents and at low temperatures. Many of the LEDs made in the 1970s and 1980s are still in service in the early 21st century. Typical lifetimes quoted are 25,000 to 100,000 hours, but heat and current settings can extend or shorten this time significantly.

The most common symptom of LED (and diode laser) failure is the gradual lowering of light output and loss of efficiency. Sudden failures, although rare, can occur as well. Early red LEDs were notable for their short service life. With the development of high-power LEDs the devices are subjected to higher junction temperatures and higher current densities than traditional devices.

This causes stress on the material and may cause early light-output degradation. To quantitatively classify useful lifetime in a standardized manner it has been suggested to use the terms L70 and L50, which is the time it will take a given LED to reach 70% and 50% light output respectively.

LED performance is temperature dependent. Most manufacturers' published ratings of LEDs are for an operating temperature of 25 C. LEDs used outdoors, such as traffic signals or in-pavement signal lights, and that are utilized in climates where the temperature within the light fixture gets very hot, could result in low signal intensities or even failure.

LED light output rises at lower temperatures, leveling off, depending on type, at around 30 C. Thus, LED technology may be a good replacement in uses such as supermarket freezer lighting and will last longer than other technologies. Because LEDs emit less heat than incandescent bulbs, they are an energy-efficient technology for uses such as in freezers and refrigerators. However, because they emit little heat, ice and snow may build up on the LED light fixture in colder climates.

Similarly, this lack of waste heat generation has been observed to sometimes cause significant problems with street traffic signals and airport runway lighting in snow-prone areas. In response to this problem, some LED lighting systems have been designed with an added heating circuit at the expense of reduced overall electrical efficiency of the system; additionally, research has been done to develop heat sink technologies that will transfer heat produced within the junction to appropriate areas of the light fixture.

Current bright blue LEDs are based on the wide band gap semiconductors GaN (gallium nitride) and InGaN (indium gallium nitride). They can be added to existing red and green LEDs to produce the impression of white light. Modules combining the three colors are used in big video screens and in adjustable-color fixtures.

The first blue LEDs using gallium nitride were made in 1971 by Jacques Pankove at RCA Laboratories. These devices had too little light output to be of practical use and research into gallium nitride devices slowed. In August 1989, Cree Inc. introduced the first commercially available blue LED based on the indirect bandgap semiconductor, silicon carbide. SiC LEDs had very low efficiency, no more than about 0.03%, but did emit in the blue portion of the visible light spectrum.

In the late 1980s, key breakthroughs in GaN epitaxial growth and p-type doping ushered in the modern era of GaN-based optoelectronic devices. Building upon this foundation, in 1993 high-brightness blue LEDs were demonstrated. High-brightness blue LEDs invented by Shuji Nakamura of Nichia Corporation using gallium nitride revolutionized LED lighting, making high-power light sources practical.

By the late 1990s, blue LEDs had become widely available. They have an active region consisting of one or more InGaN quantum wells sandwiched between thicker layers of GaN, called cladding layers. By varying the relative In/Ga fraction in the InGaN quantum wells, the light emission can in theory be varied from violet to amber.

Aluminium gallium nitride (AlGaN) of varying Al/Ga fraction can be used to manufacture the cladding and quantum well layers for ultraviolet LEDs, but these devices have not yet reached the level of efficiency and technological maturity of InGaN/GaN blue/green devices. If un-alloyed GaN is used in this case to form the active quantum well layers, the device will emit near-ultraviolet light with a peak wavelength centred around 365 nm. Green LEDs manufactured from the InGaN/GaN system are far more efficient and brighter than green LEDs produced with non-nitride material systems, but practical devices still exhibit efficiency too low for high-brightness applications.

With nitrides containing aluminium, most often AlGaN and AlGaInN, even shorter wavelengths are achievable. Ultraviolet LEDs in a range of wavelengths are becoming available on the market. Near-UV emitters at wavelengths around 375395 nm are already cheap and often encountered, for example, as black light lamp replacements for inspection of anti-counterfeiting UV watermarks in some documents and paper currencies.

Shorter-wavelength diodes, while substantially more expensive, are commercially available for wavelengths down to 240 nm. As the photosensitivity of microorganisms approximately matches the absorption spectrum of DNA, with a peak at about 260 nm, UV LED emitting at 250270 nm are to be expected in prospective disinfection and sterilization devices. Recent research has shown that commercially available UVA LEDs (365 nm) are already effective disinfection and sterilization devices.

White light can be formed by mixing differently colored lights; the most common method is to use red, green, and blue (RGB). Hence the method is called multi-color white LEDs (sometimes referred to as RGB LEDs). Because these need electronic circuits to control the blending and diffusion of different colors, and because the individual color LEDs typically have slightly different emission patterns (leading to variation of the color depending on direction) even if they are made as a single unit, these are seldom used to produce white lighting.

Nevertheless, this method is particularly interesting in many uses because of the flexibility of mixing different colors, and, in principle, this mechanism also has higher quantum efficiency in producing white light.

There are several types of multi-color white LEDs: di-, tri-, and tetrachromatic white LEDs. Several key factors that play among these different methods, include color stability, color rendering capability, and luminous efficacy. Often, higher efficiency will mean lower color rendering, presenting a trade-off between the luminous efficiency and color rendering. For example, the dichromatic white LEDs have the best luminous efficacy (120 lm/W), but the lowest color rendering capability.

However, although tetrachromatic white LEDs have excellent color rendering capability, they often have poor luminous efficiency. Trichromatic white LEDs are in between, having both good luminous efficacy (>70 lm/W) and fair color rendering capability.

One of the challenges is the development of more efficient green LEDs. The theoretical maximum for green LEDs is 683 lumens per watt but as of 2010 few green LEDs exceed even 100 lumens per watt. The blue and red LEDs get closer to their theoretical limits.

Multi-color LEDs offer not merely another means to form white light but a new means to form light of different colors. Most perceivable colors can be formed by mixing different amounts of three primary colors. This allows precise dynamic color control. As more effort is devoted to investigating this method, multi-color LEDs should have profound influence on the fundamental method that we use to produce and control light color. However, before this type of LED can play a role on the market, several technical problems must be solved.

These include that this type of LED's emission power decays exponentially with rising temperature, resulting in a substantial change in color stability. Such problems inhibit and may preclude industrial use. Thus, many new package designs aimed at solving this problem have been proposed and their results are now being reproduced by researchers and scientists.

Correlated color temperature (CCT) dimming for LED technology is regarded as a difficult task, since binning, age and temperature drift effects of LEDs change the actual color value output. Feedback loop systems are used for example with color sensors, to actively monitor and control the color output of multiple color mixing LEDs.

3. Process

Light-emitting diodes (LEDs)small colored lights available in any electronics storeare ubiquitous in modern society. They are the indicator lights on our stereos, automobile dashboards, and microwave ovens. Numeric displays on clock radios, digital watches, and calculators are composed of bars of LEDs. LEDs also find applications in telecommunications for short range optical signal transmission such as TV remote controls. They have even found their way into jewelry and clothingwitness sun visors with a series of blinking colored lights adorning the brim. The inventors of the LED had no idea of the revolutionary item they were creating. They were trying to make lasers, but on the way they discovered a substitute for the light bulb.

Light bulbs are really just wires attached to a source of energy. They emit light because the wire heats up and gives off some of its heat energy in the form of light. An LED, on the other hand, emits light by electronic excitation rather than heat generation. Diodes are electrical valves that allow electrical current to flow in only one direction, just as a one-way valve might in a water pipe. When the valve is "on," electrons move from a region of high electronic density to a region of low electronic density. This movement of electrons is accompanied by the emission of light. The more electrons that get passed across the boundary between layers, known as a junction, the brighter the light. This phenomenon, known as electroluminescence, was observed as early as 1907. Before working LEDs could be made, however, cleaner and more efficient materials had to be developed.

LEDs were developed during the post-World War II era; during the war there was a potent interest in materials for light and microwave detectors. A variety of semiconductor materials were developed during this research effort, and their light interaction properties were investigated in some detail. During the 1950s, it became clear that the same materials that were used to detect light could also be used to generate light. Researchers at AT&T Bell Laboratories were the first to exploit the light-generating properties of these new materials in the 1960s. The LED was a forerunner, and a fortuitous byproduct, of the laser development effort. The tiny colored lights held some interest for industry, because they had advantages over light bulbs of a similar size: LEDs use less power, have longer lifetimes, produce little heat, and emit colored light.

The first LEDs were not as reliable or as useful as those sold today. Frequently, they could only operate at the temperature of liquid nitrogen (-104 degrees Fahrenheit or -77 degrees Celsius) or below, and would burn out in only a few hours. They gobbled power because they were very inefficient, and they produced very little light. All of these problems can be attributed to a lack of reliable techniques for producing the appropriate materials in the 1950s and 1960s, and as a result the devices made from them were poor. When materials were improved, other advances in the technology followed: methods for connecting the devices electronically, enlarging the diodes, making them brighter, and generating more colors.

The advantages of the LED over the light bulb for applications requiring a small light source encouraged manufacturers like Texas Instruments.

Diodes, in general, are made of very thin layers of semiconductor material; one layer will have an excess of electrons, while the next will have a deficit of electrons. This difference causes electrons to move from one layer to another, thereby generating light. Manufacturers can now make these layers as thin as .5 micron or less (1 micron = 1 ten-thousandth of an inch).

Impurities within the semiconductor are used to create the required electron density. A semiconductor is a crystalline material that conducts electricity only when there is a high density of impurities in it. The slice, or wafer, of semiconductor is a single uniform crystal, and the impurities are introduced later during the manufacturing process. Think of the wafer as a cake that is mixed and baked in a prescribed manner, and impurities as nuts suspended in the cake. The particular semiconductors used for LED manufacture are gallium arsenide (GaAs), gallium phosphide (GaP), or gallium arsenide phosphide (GaAsP). The different semiconductor materials (called substrates) and different impurities result in different colors of light from the LED.

Impurities, the nuts in the cake, are introduced later in the manufacturing process; unlike imperfections, they are introduced deliberately to make the LED function correctly. This process is called doping. The impurities commonly added are zinc or nitrogen, but silicon, germanium, and tellurium have also been used. As mentioned previously, they will cause the semiconductor to conduct electricity and will make the LED function as an electronic device. It is through the impurities that a layer with an excess or a deficit of electrons can be created.

To complete the device, it is necessary to bring electricity to it and from it. Thus, wires must be attached onto the substrate.

One way to add the necessary impurities to the semiconductor crystal is to grow additional layers of crystal onto the wafer surface. In this process, known as "Liquid Phase Epitaxy," the wafer is put on a graphite slide and passed underneath reservoirs of molten GaAsP.

Contact patterns are exposed on the wafer's surface using photoresist, after which the wafers are put into a heated vacuum chamber. Here, molten metal is evaporated onto the contact pattern on the wafer surface.processing such as soldering and heating. Gold and silver compounds are most commonly used for this purpose, because they form a chemical bond with the gallium at the surface of the wafer.

LEDs are encased in transparent plastic, rather like the lucite paperweights that have objects suspended in them. The plastic can be any of a number of varieties, and its exact optical properties will determine what the output of the LED looks like. Some plastics are diffusive, which means the light will scatter in many directions. Some are transparent, and can be shaped into lenses that will direct the light straight out from the LED in a narrow beam. The plastics can be tinted, which will change the color of the LED by allowing more or less of light of a particular color to pass through.

First, a semiconductor wafer is made. The particular material compositionGaAs, GaP, or something in betweenis determined by the color of LED being fabricated. The crystalline semiconductor is grown in a high temperature, high pressure chamber. Gallium, arsenic, and/or phosphor are purified and mixed together in the chamber. The heat and pressure liquify and press the components together so that they are forced into a solution. To keep them from escaping into the pressurized gas in the chamber, they are often covered with a layer of liquid boron oxide, which seals them off so that they must "stick together." This is known as liquid encapsulation, or the Czochralski crystal growth method. After the elements are mixed in a uniform solution, a rod is dipped into the solution and pulled out slowly. The solution cools and crystallizes on the end of the rod as it is lifted out of the chamber, forming a long, cylindrical crystal ingot (or boule) of GaAs, GaP, or GaAsP. Think of this as baking the cake.

Then boule is then sliced into very thin wafers of semiconductor, approximately 10 mils thick, or about as thick as a garbage bag. The wafers are polished until the surfaces are very smooth, so that they will readily accept more layers of semiconductor on their surface. The principle is similar to sanding a table before painting it. Each wafer should be a single crystal of material of uniform composition. Unfortunately, there will sometimes be imperfections in the crystals that make the LED function poorly. Think of imperfections as unmixed bits of flower or sugar suspended in the cake during baking. Imperfections can also result from the polishing process; such imperfections also degrade device performance. The more imperfections, the less the wafer behaves like a single crystal; without a regular crystalline structure, the material will not function as a semiconductor.

Next, the wafers are cleaned through a rigorous chemical and ultrasonic process using various solvents. This process removes dirt, dust, or organic matter that may have settled on the polished wafer surface. The cleaner the processing, the better the resulting LED will be.

Additional layers of semiconductor crystal are grown on the surface of the wafer, like adding more layers to the cake. This is one way to add impurities, or dopants, to the crystal. The crystal layers are grown this time by a process called Liquid Phase Epitaxy (LPE). In this technique, epitaxial layerssemiconductor layers that have the same crystalline orientation as the substrate beloware deposited on a wafer while it is drawn under reservoirs of molten GaAsP. The reservoirs have appropriate dopants mixed through them. The wafer rests on a graphite slide, which is pushed through a channel under a container holding the molten liquid (or melt, as it is called). Different dopants can be added in sequential melts, or several in the same melt, creating layers of material with different electronic densities. The deposited layers will become a continuation of the wafer's crystal structure.LPE creates an exceptionally uniform layer of material, which makes it a preferred growth and doping technique. The layers formed are several microns thick.

After depositing epitaxial layers, it may be necessary to add additional dopants to alter the characteristics of the diode for color or efficiency. If additional doping is done, the wafer is again placed in a high temperature furnace tube, where it is immersed in a gaseous atmosphere containing the dopantsnitrogen or zinc ammonium are the most common. Nitrogen is often added to the top layer of the diode to make the light more yellow or green.

Metal contacts are then defined on the wafer. The contact pattern is determined in the design stage and depends on whether the diodes are to be used singly or in combination. Contact patterns are reproduced in photoresist, a light-sensitive compound; the liquid resist is deposited in drops while the wafer spins, distributing it over the surface. The resist is hardened by a brief, low temperature baking (about 215 degrees Fahrenheit or 100 degrees Celsius).

Next, the master pattern, or mask, is duplicated on the photoresist by placing it over the wafer and exposing the resist with ultraviolet light (the same way a photograph is made from a negative). Exposed areas of the resist are washed away with developer, and unexposed areas remain, covering the semiconductor layers.

Contact metal is now evaporated onto the pattern, filling in the exposed areas. Evaporation takes place in another high temperature chamber, this time vacuum sealed. A chunk of metal is heated to temperatures that cause it to vaporize. It condenses and sticks to the exposed semiconductor wafer, much like steam will fog a cold window. The photoresist can then be washed away with acetone, leaving only the metal contacts behind. Depending on the final mounting scheme for the LED, an additional layer of metal may be evaporated on the back side of the wafer. Any deposited metal must undergo an annealing process, in which the wafer is heated to several hundred degrees and allowed to remain in a furnace (with an inert atmosphere of hydrogen or nitrogen flowing through it) for periods up to several hours. During this time, the metal and the semiconductor bond together chemically so the contacts don't flake off.

A single 2 inch-diameter wafer produced in this manner will have the same pattern repeated up to 6000 times on it; this gives an indication of the size of the finished diodes. The diodes are cut apart either by cleaving (snapping the wafer along a crystal plane) or by sawing with a diamond saw. Each small segment cut from the wafer is called a die. A difficult and error prone process, cutting results in far less than 6000 total useable LEDs and is one of the biggest challenges in limiting production costs of semiconductor devices.

Individual dies are mounted on the appropriate package. If the diode will be used by itself as an indicator light or for jewelry, for example, it is mounted on two metal leads about two inches long. Usually, in this case, the back of the wafer is coated with metal and forms an electrical contact with the lead it rests on. A tiny gold wire is soldered to the other lead and wire-bonded to the patterned contacts on the surface of the die. In wire bonding, the end of the wire is pressed down on the contact metal with a very fine needle. The gold is soft enough to deform and stick to a like metal surface.Finally, the entire assembly is sealed in plastic. The wires and die are suspended inside a mold that is shaped accordingly.

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