JB Juice Company Uses a Manufacturing Process That Has Two

question 102

Multiple Choice

JB Juice Company uses a manufacturing process that has two distinct stages: the juicing process (P1) and the straining process (P2) . Raw material is consumed in P1 at the beginning of the process. No additional raw material is required in the second stage of the process (in P2) . The following information pertains to the production of 5,000 units of output in March 2011:
Assume 5,000 units are 100% complete with respect to raw materials and conversion costs at the end of March.

-The conversion cost per unit of output for stage PI for the JB Juice Company totals:

• A)$84 per unit.
• B)$36 per unit.
• C)$64 per unit.
• D)$20 per unit.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or sales, such as materials and labor.

Net Book Value

The difference between the cost of a fixed asset and its accumulated depreciation.

Differential Effect

The financial impact of choosing one option over another in decision-making scenarios, focusing on differences in costs and benefits.

Variable Selling Cost

Selling costs that vary directly with the volume of sales, such as commissions or shipping fees.