What was the average cost per kg of finished output during the month?

Eton Ltd. operates a manufacturing process that produces product A.

Information for this process last month is as follows:

(a) Opening work in progress – 2,500 kg valued at £2,000 for direct material and £1,500 for labour and overheads.

(b) Materials input – 25,000 kg at £2.10 per kg.

(c) Labour – £10,000

(d) Overheads – £5,000

(e) Output during the month – 20,000 kg.

(f) There were 7,500 units of closing work in progress which was complete as to materials and 30% complete as to conversion.

(g) Normal loss for the month was 3% of input and all losses have a scrap value of £1 per kg.

What was the average cost per kg of finished output during the month?

A. £1.73

B. £2.72

C. £2.78

D. £2.80

View Answer

Answer: C