Figure 5-4
the Following Information Is Available for Department X

question 43

Multiple Choice

Figure 5-4
The following information is available for Department X for August: $\begin{array}{lr}\text { Work in progress, August } 1\\\text { Materials } & £ 8,000 \\\text { Conversion costs } & £ 15,000\\\\\text { Costs added during August:}\\\text { Materials}& £ 28,000 \\\text { Conversion costs}&£ 25,000 \\\\\text { Equivalent units of production (weighted average) :}\\\text { Materials}&4,000\\\text { Conversion}&5,000\\\end{array}$
-Refer to Figure 5-4. Department X's cost per equivalent unit for conversion using the weighted average method would be

• A)£8.00.
• B)£5.00.
• C)£3.00.
• D)£9.00.

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Definitions:

Short Run

A period in economics during which at least one factor of production is considered fixed, focusing on immediate effects of changes in demand or supply.

Expansionary Gap

The amount by which actual output in the short run exceeds the economy’s potential output

Recessionary Gap

The amount by which actual output in the short run falls short of the economy’s potential output.

Expected Price Level

The anticipated average price of goods and services in an economy at a given future time, influencing consumer and business behavior.