Question
In a processing unit, 1,000 units are introduced in
Process A. 100 units are normal loss, and 50 units are abnormal loss. Cost incurred is ā¹10,000. What is the cost per unit?Solution
Normal loss is not assigned cost. So cost is spread over (1,000 ā 100) = 900 units. Cost/unit = ā¹10,000 Ć· 950 = ā¹10.53 (abnormal loss is included in cost calculation).
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