Kristi and Rebecca Sell Lemonade on the Corner

question 54

Multiple Choice

Kristi and Rebecca sell lemonade on the corner.It costs them 7 cents to make each cup.On a certain day,they sell 40 cups.Their producer surplus for that day amounts to $19.20.Kristi & Rebecca sold each cup for

• A)31 cents.
• B)38 cents.
• C)45 cents.
• D)55 cents.

---

Definitions:

Manufacturing Overhead Costs

Indirect costs associated with manufacturing, including costs of running the factory, maintenance, and utilities, that cannot be directly traced to a product.

Job-Order Costing

An accounting system that accumulates costs according to individual jobs rather than processes or time periods.

Process Costing

A costing method used for homogeneous products, where costs are accumulated for a continuous process and then assigned to units of output.

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.