Answer the Following Questions Using the Information Below

question 48

Multiple Choice

Answer the following questions using the information below:
The Daltry Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Daltry Tractor uses weighted-average costing.
Data for the Assembly Department for April 2012 are:
Costs for April 2012:

-What is the direct materials cost per equivalent unit during April?

• A)$1,250.00
• B)$1,241.94
• C)$575.00
• D)$581.25

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Definitions:

Opportunity Cost

The potential benefit that may be obtained from following an alternative course of action.

Nonfinancial Information

Information that is not monetary in nature, such as customer satisfaction, employee turnover, and operational efficiency, used in decision making.

Unprofitable Segment

A division or branch of a company that does not generate profit and may cause a financial drain on the business.

Hurdle Rate

The minimum rate of return on an investment that is required by a manager or investor to proceed with the investment.