Outrageous Cups Corp $\text { Three types of cups were produced in April. The quantities and direct materials costs were: }$

Outrageous Cups Corp. manufactures cups. The company's manufacturing operations and costs applied to products for April were: $\begin{array}{lrrr} & \text { Molding } & \text { Heat-treat } & \text { Finishing } \\\text { Direct labor } & \$ 25,000 & \$ 12,500 & \$ 7,500 \\\text { Factory overhead } & 30,000 & 17,500 & 12,600 \\\hline\text { Total }& \$ 55,000& \$ 30,000 & \$ 20,100\\\end{array}$
$\text { Three types of cups were produced in April. The quantities and direct materials costs were: }$

$\begin{array}{llr}\text { Type } &\text { Quantity } & \text { Direct Materials }\\\hline\text { Casts } & 5,000 & \$ 15,000 \\\text { Cups } & 7,000 & 22,470 \\\text { Mugs } & 8,000 & 32,500\end{array}$
Casts are produced in the Molding Department. Cups pass through the Molding and Finishing Departments. Mugs pass through all three departments. An operations costing system is used.
What is Outrageous Cups' total cost per unit for Cups in April?

A) $4.09
B) $7.30
C) $7.84
D) $11.05

Correct Answer:

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