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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: 2,600.Directlabor:2,600. Direct labor: 3,800. Manufacturing overhead: 2,200.ThecostofeachunitproducedinMayis2,200. The cost of each unit produced in May is .

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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: 2,600Directlabor:2,600 Direct labor: 3,800 Manufacturing overhead: 2,200Totalcost=2,200 Total cost = 2,600 + 3,800+3,800 + 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 = 8,600/1,000=8,600 / 1,000 = 8.6

So, the cost of each unit produced in May is $8.6.

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