The Cost of Production Report for August Shows Conversion Costs

question 187

Multiple Choice

The cost of production report for August shows conversion costs for 5,000 gallons, 70% complete, to be $2,450. The conversion cost per equivalent unit in July was $0.75. Which of the following best describes the change in the conversion costs between the two months?

• A)The conversion costs increased by $0.05 per unit, indicating an improvement.
• B)The conversion costs increased by $160 overall, indicating an unfavorable change.
• C)The conversion costs decreased by $0.05 per unit, indicating an improvement.
• D)The conversion costs decreased by $0.05 per unit, indicating an unfavorable change.

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Definitions:

Job Descriptions

Formal documents that outline the duties, responsibilities, qualifications, and conditions of a particular role or job.

Coordination Through Standardization

is the process of establishing common routines and procedures across an organization to streamline operations and ensure consistency.

Standardizing Processes

Standardizing Processes involves creating uniform procedures or protocols to ensure consistency, efficiency, and quality in the execution of tasks or operations.

Non-Routine Work

Work that involves dealing with unexpected conditions and problems, requiring creativity and problem-solving skills.