Use the Information Below to Answer the Following Question(s)

question 23

Multiple Choice

Use the information below to answer the following question(s) .Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process.
-What is the materials cost per unit in January using the FIFO method?

• A)$2.00
• B)$1.67
• C)$2.25
• D)$2.50
• E)$3.00

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Definitions:

Preference Rights

A set of privileges or priorities given to shareholders, such as the right to purchase new shares before the general public.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.

Dividends

Portions of a corporation's earnings distributed to shareholders as a reward for their investment.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest.