Answer the Following Questions Using the Information Below

question 86

Multiple Choice

Answer the following questions using the information below:
Dustin Plastics, Inc., manufactures plastic moldings for car seats.Its costing system uses two cost categories, direct materials and conversion costs.Each product must pass through Department A and Department B.Direct materials are added at the beginning of production.Conversion costs are allocated evenly throughout production.Data for Department A for February 2018 are:
Costs for the Department A for February 2018 are:

-What is the material cost per equivalent unit in Department A?

• A)$2,000
• B)$2,750
• C)$3,667
• D)$2,500
• E)$3,143

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Definitions:

Beginning Inventory

The value of all inventory that a company has in stock at the start of an accounting period.

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated before the new accounting period begins.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically at the end of accounting periods, rather than after each sale or purchase.

Average Cost Method

An inventory costing method that assigns the average cost of all similar items in inventory to the cost of goods sold and to ending inventory.