A Granary Allocates the Cost of Unprocessed Wheat to the Production

question 89

Multiple Choice

A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $120,000, and the following quantities of product and sales revenues were produced. How much of the $120,000 cost should be allocated to feed if the value basis is used?

• A) $12,250.
• B) $42,000.
• C) $45,000.
• D) $70,000.
• E) $100,000.

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Definitions:

Sample Means

The average value of a set of observations drawn from a population.

Lower Control Limit

The threshold in a control chart below which the process variation is considered to indicate an out-of-control condition.

Correct Mean

The accurate average value of a data set computed by summing all the values and dividing by the count of the values.

Process

A sequence of measures or procedures followed to accomplish a specific goal.