A local factory operates a water purification utility that is required to calculate product costs. One unit is a cubic meter of purified water. In the beginning of January there was no work in process. During January, the utilities started a production of 80 000 cubic meters, of which 70 000 cubic meters were complete by the end of the month. The degree of completion for work-in-process at the end of the month was 90%. There were no losses recorded in the process.

Material (chemical) costs for the month were 140 000 and conversion costs were 120 000. These costs are added to the production process differently. The chemicals are added in the beginning, while the conversion costs are spread evenly to the production process. Thus, cost of one cubic meter of purified water in January were:

a.

3,71

b.

3,35

c.

3,27

d.

3,50