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

question 126

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 cost? (Round to nearest cent.)

• A)$54.05
• B)$42.59
• C)$48.32
• D)$93.37

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Definitions:

Purchasing Power

The ability of an individual or entity to buy goods and services, generally influenced by income and price levels.

Per Capita Income

A measure of the average income earned per person in a certain area in a specified year.

Economic Forces

Fundamental market pressures that influence the supply, demand, and pricing of goods and services within an economy.