Question

Confectioners, a chain of candy stores, purchases its candy in bulk from its suppliers. For a recent shipment, the company paid $2400 and received 7800 pieces of candy that are allocated among three groups. Group 1 consists of 2320 pieces that are expected to sell for $0.15 each. Group 2 consists of 5140 pieces that are expected to sell for $0.28 each. Group 3 consists of 340 pieces that are expected to sell for $0.64 each. Using the relative sales value method, what is the cost per item in Group 1? $0.34 $0.18. $0.76 $0.31

Answer 1

Answer B. $0.18

	Group 1	Group 2	Group 3
pieces	2320	5140	340
selling price	0.15	0.28	0.64
total	348	1439.2	217.6
total (cummulative)	2004.8
relative cost of Group 1
(2320*0.15)/2004.80(A)	$       0.17
(A)*$2400=B	$ 416.60
PIECES OF GROUP 1(C)	2320
per unit (B/C)	$       0.18