Reed Production Has Provided the Following Information for the Year

question 156

Multiple Choice

Reed Production has provided the following information for the year 2015: $$\begin{array} { | l | r | } \hline \text { Direct Labor } & \$ 153,000 \\\hline \text { Beginning Work-in-Process Inventory } & 62,500 \\\hline \text { Direct Materials Used } & 271,000 \\\hline \text { Ending Work-in-Process Inventory } & 53,850 \\\hline \text { Manufacturing Overhead } & 135,500 \\\hline\end{array}$$ During the year, Reed produced 71,020 units of product. Calculate the unit product cost.

• A) $8.00
• B) $10.00
• C) $9.52
• D) $7.88

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Definitions:

Debt/Equity Ratio

An indicator that measures the balance between shareholders' equity and debt in financing a company's assets, often used in examining the firm's financial leverage.

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its equity.

After-Tax Cash Flows

The net cash inflow or outflow after taking into account the effects of taxation.

After-Tax Cost

The expense of a transaction or investment after taking into account the effects of taxes.