The Debits to Work in Process--Assembly Department for April, Together

question 160

Multiple Choice

The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories.
The materials cost per equivalent unit (to the nearest cent) for April is:

• A) $2.60
• B) $2.81
• C) $3.02
• D) $2.26

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Definitions:

Law of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain at a constant.

Average Total Costs

The cost of producing each unit, calculated by dividing the overall production expense by the number of units produced.