Talamoto Co

question 87

Multiple Choice

Talamoto Co. manufactures a single product that goes through two processes — mixing and cooking. The following data pertains to the Mixing Department for September.Material P is added at the beginning of work in the Mixing Department. Material Q is also added in the Mixing Department, but not until units of product are forty percent completed with regard to conversion. Conversion costs are incurred uniformly during the process.
Cost per equivalent unit for Material P under the weighted-average method is calculated to be:

• A) $2.75.
• B) $4.60.
• C) $3.00.
• D) $2.30.
• E) $5.65.

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Definitions:

Average Total Cost

The total cost per unit of output, calculated by dividing the total cost of production by the number of units produced.

Marginal Cost Curve

A graph that shows the change in the total cost of producing one additional unit of a good or service.

Diminishing Marginal Product

The principle that as additional units of a variable input are added to a fixed input, the additional output produced from each new unit decreases.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of a product changes as production volume increases.