The Following Amounts Were Selected from the Production Report of Chandon

question 17

Multiple Choice

The following amounts were selected from the production report of Chandon Corporation: $\begin{array}{lr}\text { Actual units in production } & 42,000 \\\text { Equivalent units (materials) } & 42,000 \\\text { Equivalent units (conversion) } & 39,000 \\\text { Cost per equivalent unit (materials) } & £ 1.10 \\\text { Cost per equivalent unit (conversion) } & £ 0.90\end{array}$ Chandon uses the weighted average method in preparing its production reports. Chandon's total production cost to be accounted for must have been

• A) \( £ 81,300 \).
• B) \( £ 84,000 \).
• C) \( £ 89,100 \).
• D) \( £ 72,900 \).

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Definitions:

Economic Losses

Refers to the situation where total costs exceed total revenues, leading to a negative net income for a business.

Marginal Cost

The growth in overall costs resulting from the manufacture of one more unit of a good or service.

Economic Losses

Situations where total costs exceed total revenues, indicating that resources may be better utilized elsewhere.

Average Variable Cost

The total variable costs (costs that change with the level of output) of production divided by the quantity of output produced.