This is a BPP MCQ.
A manufacturer produces Product X from three input raw materials, P, Q and R. There is some loss in the process, usually about 5% of input. Results for the most recent month are as follows.
Input
5000kg of P, cost of $15000
2000kg of Q, cost of $8000
1000kg of R, cost of $8000
Output
7500kg of Product X
Which one of the following performance measurements is accurate?
A) Rate of wastage = 6.7%
B) Average cost of input = 4.13 per kg
C) Output: input conversion ratio = 6.25%
D) Materials yield variance = $1938(A)
The correct answer is B. I think this should be average cost of output.
Help me, Sir.
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Process Costing
You are correct.
Assuming you have typed the question correctly, then it seems as though it is a BPP typing error.
Maybe one day :-)
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