A Company Starts Work on 1000 Physical Units and Completes

question 64

Multiple Choice

A company starts work on 1000 physical units and completes 75 per cent of conversion activity. The costs are $1500 for conversion and $5000 for direct material. What is the cost per equivalent unit for direct material?

• A) $10.00 per unit
• B) $5.00 per unit
• C) $6.00 per unit
• D) $6.67 per unit

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Definitions:

Germinal Period

Also referred to as the period of the zygote; refers to the first 2 weeks after conception.

Zygote

The initial cell formed when a new organism is produced by the joining of a male sperm and a female ovum.

Blastocyst

An early stage embryo consisting of a sphere of cells surrounding a fluid-filled cavity and a cluster of cells inside known as the inner cell mass, which eventually develops into the fetus.

Fetus

A developing mammal or human from the end of the embryonic stage (usually from nine weeks after fertilization) to birth.