28. LO.2 (WA EUP; cost per WA EUP) Kahil Mfg. makes skateboards and uses a weighted average process costing system. On May 1, 2013, the company had 400 boards in process that were 70 percent complete as to material and 85 percent com- plete as to conversion. During the month, 3,800 additional boards were started, and 300 boards were still in process (40 percent complete as to material and 60 percent complete as to conversion) at the end of May. Cost information for May 2013 is as follows: Beginning WIP Inventory costs Direct material $ 4,349 Conversion 4,658 Current period costs Direct material 60,775 Conversion 46,750 a. Calculate EUP for each cost component using the weighted average method. b. Calculate cost per EUP for each cost component. Suppose the real risk-free rate is 2.50% and the future rate of inflation is expected to be constant at 7.00%. What rate of return would you expect on a 5-year Treasury security, assuming the pure expectations theory is valid? o Disregard cross-product terms, i.e., if averaging is required, use the arithmetic average