Answer the Following Questions Using the Information Below

question 65

Multiple Choice

Answer the following questions using the information below:
The Townsend 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.Townsend Tractor uses weighted-average costing.
-What is the Townsend Company direct materials cost per equivalent unit during April?

• A)$1,250.00
• B)$1,241.94
• C)$575.00
• D)$581.25
• E)$900.00

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Definitions:

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that vary with the level of production, such as utilities and materials.

Direct Labor-Hours

The cumulative hours employees spend directly participating in the manufacturing process.

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies directly with production volume, such as utilities or raw materials.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated overhead costs and an allocation base.