Martinez Products manufactures a line of desk chairs. Martinez's production operations are divided into two departments — Department 1 and Department 2. The company uses a process costing system. Martinez incurred the following costs during the year to produce 26,300 chairs: Department 1 $860,500 Department 2 $295,000 If Martinez sells 22,700 chairs during the year, what will be the cost per chair produced? (Round your answer to two decimal places.) A. $37.91 B. $50.90 C. $43.94 D. 32.72

Martinez Products manufactures a line of desk chairs. Martinez's production operations are divided into two departments — Department 1 and Department 2. The company uses a process costing system. Martinez incurred the following costs during the year to produce 26,300 chairs: Department 1 $860,500 Department 2 $295,000 If Martinez sells 22,700 chairs during the year, what will be the cost per chair produced? (Round your answer to two decimal places.) A. $37.91 B. $50.90 C. $43.94 D. 32.72

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Martinez Products manufactures a line of desk chairs. Martinez's production operations are divided into two departments

—

Department 1 and Department 2. The company uses a process costing system. Martinez incurred the following costs during the year to produce

26,300

chairs:

Department 1	$860,500
Department 2	$295,000

If Martinez sells

22,700

chairs during the year, what will be the cost per chair produced? (Round your answer to two decimal places.)

$37.91

$50.90

$43.94

32.72

Definition Definition Operation costing method employed to determine the value of a product at each process or stage of the production process, applicable where goods produced from a series of continuous operations or procedure. Process costing is employed by businesses that manufacture goods and where production is in repetitive inflow.

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