ABC Company incurred the following product costs to manufacture 1,000 finished units in May. Direct materials: $2,600. Direct labor: $3,800. Manufacturing overhead: $2,200. The cost of each unit produced in May is $.
Question
ABC Company incurred the following product costs to manufacture 1,000 finished units in May. Direct materials: 3,800. Manufacturing overhead: .
Solution
To calculate the cost of each unit produced in May, you need to add up all the costs and then divide by the number of units produced.
Step 1: Add up all the costs Direct materials: 3,800 Manufacturing overhead: 2,600 + 2,200 = $8,600
Step 2: Divide the total cost by the number of units produced Cost per unit = Total cost / Number of units Cost per unit = 8.6
So, the cost of each unit produced in May is $8.6.
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