If the Costs for Direct Materials, Direct Labor, and Factory

question 175

True/False

If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00.

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Definitions:

Opportunity Cost

The value of the best alternative foregone where a choice needs to be made between several mutually exclusive alternatives.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Value

Value of cash flows at a future date, taking into account interest accumulated between when the cash flow occurred and the future date.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset’s book value declines compared to straight-line depreciation.