Saturn Corporation
Begining Invent Ouy (30\% Complete as to Material $60 \%$

question 48

Multiple Choice

Saturn Corporation
Begining invent ouy (30\% complete as to Material B and $60 \%$ complete for                                   700                                  units
conversion

Started this cycle                                                                                                                                    2,000                               units
Ending inventory (50\% complete as to Material B and $80 \%$ complete for conversion)                       500                                  units



$\begin{array}{lc}\text { Beginuing inventory costs: } & \\\text { Material A } &\$ 14,270 \\\text { Material B } &5,950 \\\text { Conversion } & 5,640 \\\text { Current Period costs: } & \\\text { Material A } & \$ 40,000\\\text { Material B } &70,000 \\\text { Conversion } & 98,100\end{array}$


Material A is added at the start of production,while Material B is added uniformly throughout the process.
Refer to Saturn Corporation Assuming a weighted average method of process costing,compute the average cost per EUP for conversion.

• A)$39.90
• B)$45.00
• C)$43.03
• D)$47.59

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Definitions:

Average Cost

The total cost of production divided by the total quantity produced, representing the cost per unit of output.

Diminishing Marginal Productivity

A principle in economics that indicates that as one inputs more of a factor of production while holding other factors constant, the additions to output will eventually decrease.

Output

The quantity of goods or services produced in a given period by a firm, industry, or country.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, typically characterized by a reduction in per-unit cost with increasing output.