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:

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population, showing how much variation exists from the average.

Square Root

A mathematical function that produces the original number when multiplied by itself.

Null Hypothesis

A hypothesis that suggests there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.

Standard Error of the Mean

A statistical measure that estimates the sampling variability of the mean from different samples drawn from the same population.