[CPRODO]

Q: Compute The Average Unit Cost Of Production
Q: Determine The Cost Of The Dec 31 Finish Goods Inventory

Data:
Company Sell $325 Per Unit
Number Of Units Produced 20000
Number Of Units Sold 17000
Variable Costs Per Unit
Direct Materials 25
Direct Labor 35
Manufacturing Overhead 60
Annual Fixed Costs
Manufacturing Overhead 400000
Selling And Administrative 140000

Campany Carries Its Finished-goods Inventory At Average Unit Cost Of Production.
There Was No Work In Process At Year-end

[Curlyben]

Please refer to this Announcement

[flowerspring]

Average unit cost of production= Total joint production cost/ no. of units produce

total joint production cost- is a cost which arises from the common processing or manufacturing of products produced from a common raw materials.

joint cost may include Direct materials, Direct labor, and overhead cost incurred during joint production process

ans: Average unit cost:
total joint production cost= 25+35+60=120*20000=2400000 -which is also the total variable cost divided by
no. of units produce=20000
therefore, average unit cost of production is = 120

total Cost=fixed cost+variable cost

fixed cost= 540000
unit variable cost= 120
units produced 20000

total cost=540000+ 120*20000
=2940000
total unit cost= 2940000/20000
=147