Which of the Following Formulae Is Used to Calculate the Cost

question 56

Multiple Choice

Which of the following formulae is used to calculate the cost per equivalent unit of production (EUP) for direct materials?

• A)Cost per EUP for direct materials = Total conversion costs ÷ Equivalent units of production for direct materials
• B)Cost per EUP for direct materials = Total direct materials costs ÷ Equivalent units of production for direct materials
• C)Cost per EUP for direct materials = Total transferred in costs ÷ Equivalent units for transferred in
• D)Cost per EUP for direct materials = Total direct materials costs ÷ Equivalent units of production for conversion costs

---

Definitions:

Marginal Product

The additional output generated by employing one more unit of a particular input, keeping other inputs constant.

Units of Labor

Measurements used to quantify the work input by labor forces, often referring to hours worked or number of workers.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Marginal Product Curve

A graphical representation that shows how the addition of one more unit of a resource to production affects the output of a product.