Nature's Best Milk
Nature's Best Milk Produces Dairy Equipment -Refer to Nature's Best Milk

question 171

Multiple Choice

Nature's Best Milk
Nature's Best Milk produces dairy equipment. Most of its jobs have a number of units per job. The company has two different departments through which all jobs pass. Overhead is applied using a plantwide rate of $13 per direct labour hour. Direct labour wages average $8 an hour. Data for Job 3 for the year are as follows: $$\begin{array} { l r } \text { Direct Materials } & \$ 50,000 \\\text { Direct Labour Costs } & \\\text { Dept. A } & 60,000 \\\text { Dept. B } & 12,000 \\\text { Machine hours used } & \\\text { Dept A } & 200 \\\text { Dept. B } & 2,400 \\\text { Units Produced } & 20,000\end{array}$$
-Refer to Nature's Best Milk. What is the cost per unit?

• A) $5.60
• B) $5.73
• C) $11.95
• D) $13.00

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Definitions:

Notes Receivable

Financial assets representing amounts owed to the holder by others, typically arising from selling goods or services on credit.

Long-Term Credit Sales

Sales made on credit with repayment terms extending beyond the standard period, typically over a year or more.

Profitable Credit Sales

Sales made on credit that generate a profit for the company, after accounting for the cost of goods sold and other expenses related to the sale.

Net Realizable Value

The estimated selling price of goods, minus the costs of their sale or disposal, used in accounting to determine the value of an asset in the balance sheet.