Answer the Following Questions Using the Information Below

question 74

Multiple Choice

Answer the following questions using the information below:
Argon Corp. had capacity to produce 15,000 units of L3 using 30,000 kg of direct materials. Argon produced 14,750 units of L3 by processing 27,500 kg of direct materials. Conversion cost per unit is $7.50. Argon can add or reduce manufacturing capacity in increments of 2,500 kgs.
-What is the cost of unused capacity for conversion costs of Argon?

• A) $3,750
• B) $7,500
• C) $9,375
• D) $1,875

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Definitions:

Personal Property

Assets or belongings that are not permanently attached to, or part of, real estate.

Testate Succession

The legal process of distributing a deceased person's assets in accordance with their will.

Intestate Succession

The process by which the property of a deceased person is distributed when they die without a valid will, based on laws of the state or country.

Life Estate

An ownership interest in which the holder has the right to possess the property until her or his death.