Question - Plastic Molding, Inc.'s costing system utilizes two cost categories; direct materials and conversion costs. Each product must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for March are:
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Work in process, beginning inventory, 40% converted
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400 units
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Units started during March
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1,200 units
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Work in process, ending inventory
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200 units
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Work in process, beginning inventory:
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Direct materials
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$200,000
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Conversion costs
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$200,000
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Direct materials costs added during March
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$2,000,000
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Conversion costs added during March
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$2,500,000
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What is the unit cost for February in the Assembly Department?
a. $1,750
b. $1,000
c. $3,500
d. $3,900
e. $3,750