Question

Monroe Materials processes a purchased material, PM-20, and produces three outputs, α, β, and γ. In February, the costs to process PM-20 are $1,164,000 for materials and $708,000 for conversion costs. The results of the processing follow:

a) α, β, and γ are products of PM-20 processing.

b) The conversion costs for PM-20 processing are higher than the material costs.

c) The total costs of PM-20 processing are $1,872,000.

d) The material costs for PM-20 processing are $456,000.

Answer 1

Monroe Materials processes PM-20 and produces α, β, and γ. The total costs of PM-20 processing are $1,872,000. The conversion costs for PM-20 processing are higher than the material costs.

Step-by-step explanation:

Monroe Materials processes a purchased material, PM-20, and produces three outputs: α, β, and γ. In February, the costs to process PM-20 were $1,164,000 for materials and $708,000 for conversion costs.

The total costs of PM-20 processing are $1,872,000, which includes both the material costs and the conversion costs. Therefore, statement (c) is correct.

The material costs for PM-20 processing are not given directly, so we cannot determine if statement (d) is correct without additional information.

Based on the given information, the conversion costs for PM-20 processing are higher than the material costs. Therefore, statement (b) is correct.