Reference no: EM13794355
Information from the accounting system revealed the following:
Day 1 Day 2 Day 3 Day 4 Day 5 .
Materials $20,000 $19,000 $21,500 $21,000 $21,000
Electricity 2,500 3,000 4,000 4,900 5,200
Maintenance 4,000 3,900 4,000 3,900 4,200
Total costs $26,500 $25,900 $29,500 $29,800 $30,400
Pounds produced ÷10,000 ÷ 9,000 ÷10,000 ÷10,000 ÷10,000
Cost per unit $ 2.65 $ 2.88 $ 2.95 $ 2.98 $ 3.04
Which of the following statements best interprets the information?
A. The total costs are out of control.
B. The total costs have steadily increased because of higher electricity costs.
C. Electricity costs have steadily increased because of lack of maintenance.
D. The unit costs reveal a significant operating problem.
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