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

question 7

Multiple Choice

Use the information below to answer the following question(s) .
Father Time Clock Shop manufactures clocks on an automated assembly line. It utilizes two cost categories: direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production, while conversion costs are allocated evenly throughout production, and the company uses weighted-average costing.
Data for the Assembly Department are:

-What are the equivalent units for direct materials and conversion costs, respectively?

• A) 1,200.5 units; 1,160.64 units
• B) 1,050 units; 1,012.5 units
• C) 1,050 units; 887.5 units
• D) 962 units; 990 units
• E) 990 units and 962 units

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Definitions:

Real Options

Real options refer to choices available in investment projects that allow managers to make decisions that can alter the project's course based on future uncertainties.

Real Options

The value of additional decision-making opportunities available to a business when investing in a project.

Real Option

A financial concept that represents the value of additional future investment opportunities available to a firm when it undertakes a capital investment project.

Underlying Source of Risk

Fundamental factors that can cause uncertainty in investment returns, including but not limited to market volatility, economic changes, and geopolitical events.