The accounting records of company iclude the followinginformation relating to th

Question

The accounting records of company iclude the followinginformation relating to the current year:                                                                                               Dec1              Jan1 Materialsinventory...............................................................$20,000         $25,000 Work in processinventory...................................................   37,500           40,000 Finished goods inventory,Jan1(10,000 units@ $21 perunit)..     ?               210,000 Purchases of direct materials duringyear............................... 330,000 Direct labor costs assigned toproduction.............................   375,000 Manufacturingoverhead......................................................  637,500 The company manufactures a single product; during the currentyear, 45,000 units were manufactured and 40,000 units weresold. Compute the average per-unit cost of production during thecurrent year. The accounting records of company iclude the followinginformation relating to the current year:                                                                                               Dec1              Jan1 Materialsinventory...............................................................$20,000         $25,000 Work in processinventory...................................................   37,500           40,000 Finished goods inventory,Jan1(10,000 units@ $21 perunit)..     ?               210,000 Purchases of direct materials duringyear............................... 330,000 Direct labor costs assigned toproduction.............................   375,000 Manufacturingoverhead......................................................  637,500 The company manufactures a single product; during the currentyear, 45,000 units were manufactured and 40,000 units weresold. Compute the average per-unit cost of production during thecurrent year.

Explanation / Answer

(b)   Calculating Average per-unitcost:

Average per-unit cost = [Cost of finished goodsmanufactured / Number of units produced]

Average per-unit cost = [$1,350,000 / 45,000 units]

Average per-unit cost = $30

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