Based on the Following Information What Is the Product Cost Based on Total Average Conversion

question 29

Multiple Choice

Based on the following information: $\begin{array}{lrrrrr}&\text { Materials }&\text { Wages }&\text { Machining }&\text { Other }&\text { Total cost }\\\text { Order Processing}&\$28,000& & &&28,000\\\text { Purchasing } & 43,000 & & && 43,000 \\\text { Cutting } & \$ 160,000 & 36,000 & \$ 33,000 & \$ 8,000 & 237,000 \\\text { Forming } & 57,500 & 49,000 & 22,000 & 12,000 & 140,500 \\\text { Finishing } & 42,500 & 28,000 & 5,000 & & 75,500 \\\text { Testing } & & 30,000 & & & 30,000\\\text { Packaging and }\\\text { shipping }&&10,000&&&10,000\\\text { Invoicing }&&6,000&&&6,000\\\hline\text { Totals }&\$260,000&\$230,000&\$60,000&\$20,000&\$570,000\end{array}$

$\begin{array}{ll}\text { Part } A & 2,005 \text { units } \\\text { Part Q } & 4,100 \text { units } \\\text { Total } & 6.105 \text { units }\end{array}$ What is the product cost based on total average conversion cost? (Round to nearest cent.)

• A)$100.56
• B)$48.32
• C)$36.04
• D)$50.78

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Definitions:

Total Expenses

Represents the sum of all costs and expenses incurred by a business in a specific period, including both operational and non-operational items.

Spending Variance

The difference between the amount budgeted for spending and the actual amount spent, which can indicate over or underperformance against the budget.

Budgeting

The process of creating a plan to spend your money, outlining anticipated revenues and expenses for a certain period.

Planning Budget

A financial plan created for a specific period in the future, outlining expected revenues, expenses, and resource allocations.