Q15RQ - Horngren'S Financial And Managerial Accounting

Question

Question: A completed job cost record shows the unit cost of the products. How is this calculated?

Step-by-Step Solution

Answer

Answer:

The unit cost of the product is computed by dividing the cost of goods manufactured by the total units produced by the company.

Step 1: Cost of goods manufactured

Cost of goods manufactured is defined as the company’s total cost of production during the reporting period. It is the total amount spent by the company to produce the goods

Step 2: Formula to compute the unit cost of the product

$\mathrm{Unit} \mathrm{cost} \mathrm{of} \mathrm{the} \mathrm{product}=\frac{\mathrm{Cost} \mathrm{of} \mathrm{goods} \mathrm{manufactured}}{\mathrm{Total} \mathrm{units} \mathrm{manufactured}}$