Information About Units Processed and Processing Costs Incurred During a Recent

question 53

Multiple Choice

Information about units processed and processing costs incurred during a recent month in the Refining Department of a manufacturing company follow: The beginning work in process inventory included $11,000 of conversion cost.During the month,the Department incurred an additional $290,000 in conversion costs. Assuming that the company uses the FIFO method,what is the cost per equivalent unit for conversion costs for the month in the Blending Department to the nearest cent?

• A)$2.52
• B)$2.55
• C)$2.44
• D)$2.59

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Definitions:

Normal Rate

A term often used to refer to the standard or commonly accepted rate for a financial or economic measurement, but can vary by context.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or investment.

Economic Profits

Profits exceeding the opportunity costs of all resources employed, reflecting a return beyond the normal profit level.

Economic Costs

The total value of all the resources used in the production of goods or services, including both explicit and implicit costs.