Question

Jabari​ Manufacturing, a widgets manufacturing​ company, divides its production operations into three processeslong - Department ​1, Department​ 2, and Department 3. The company uses a process costing system. Jabari incurred the following costs during the year to produce​ 4,600 units: Department 1 ​$18,000 Department 2 ​$8,000 Department 3 ​$4,000 If Jabari could sell only​ 3,400 units during the​ year, what will be the cost per unit of widget​ produced? (Round your answer to the nearest​ cent.)

Answer 1

Answer:

Cost per unit of widget produced = $6.52

Explanation:

As for the provided information:

Total units produced = 4,600 units

Total cost of production = costs for Department 1 + Department 2 + Department 3

= $18,000 + $8,000 + $4,000 = $30,000

It does not matter how many units are sold as the cost of sales will include, selling and administrative cost also.

Therefore, all the cost will be considered.

Thus total cost of production = $30,000 for 4,600 units.

Cost per unit of widget = $\frac{30,000}{4,600} = 6.52$