Red Manufacturing Uses a Process Cost System to Manufacture Sensors

question 46

Multiple Choice

Red Manufacturing uses a process cost system to manufacture sensors for the security industry. The following information pertains to operations for the month of October.
The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs.
Costs pertaining to the month of October area as follows:
Beginning inventory costs: materials, $54,560; conversion cost, $35,560.
Costs incurred during October: materials used, $468,000; conversion cost, $574,040.

-Refer to the Figure.What would be the unit cost of materials for October when using the weighted average method?

• A)$4.50
• B)$4.60
• C)$5.03
• D)$5.46

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Definitions:

Face Value

The nominal or original value of a security or financial instrument as stated by the issuer, crucial for calculating interest payments for bonds.

Real Return

The return on an investment after adjusting for inflation, representing the actual purchasing power gained or lost.

Inflation

The speed at which the total price for goods and services escalates, lessening the purchasing force.

Coupon

Represents the interest payment made to bondholders annually or semi-annually, expressed as a percentage of the bond's face value.