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Question(s) / Instruction(s):

Moldit Inc.’s costing system uses two cost categories: direct materials and conversion costs. Each product must pass through the Assembly department and the Testing department. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production. Data for the Assembly department for March 2008 are as follows:

Beginning work-in-process inventory, 40% complete as to conversion    400 units

Units started during March                                                                                          1,200 units

Ending work-in-process inventory                                                                            200 units

Beginning work-in-process inventory:   

Direct materials                                                                $ 200,000

Conversion costs                                              200,000

Direct materials added during March      2,000,000

Conversion costs added during March    2,500,000

What unit cost can be inferred from the information provided regarding beginning work-in-process inventory?

a.            $1,000

b.            $1,750

c.             $3,500

d.            $3,750

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