C Ltd produces a chemical in a single process. Information for this process last month is as follows:
(a) Opening work in progress – 10000 kg valued at £10000 for direct material and £7500 for conversion costs.
(b) Materials input – 25000 kg at £1.10 per kg.
(c) Conversion costs – £17000
(d) Output during the month – 23000 kg.
(e) There were 7500 units of closing work in progress which was complete as to materials and 30% complete as to conversion.
(f) Normal loss for the month was 10% of input and all losses have a scrap value of 80p per kg.
What was the average cost per kg of finished output during the month?
A . £1.10
B . £1.78
C . £1.90
D . £1.99
Answer: D