Computing Unit Cost Comacho Chemical Co. recorded costs for the month of $18,900

Question

Computing Unit Cost Comacho Chemical Co. recorded costs for the month of $18,900 for materials, $44,100 for labor, and $26,250 for factory overhead. There was no beginning work in process, 8,000 units were finished, and 3,000 units were in process at the end of the period, two-thirds completed. Compute the month's unit cost for each element of manufacturing cost and the total per unit cost. (Round unit costs to three decimal places.) Round interim computations to SIX decimal places. Cost Element Materials Labor Factory overhead Total Unit Cost

Explanation / Answer

8,000 units were finished and 3,000 units were in process at the end of the period two-thirds completed.

Therefore,

Equivalent units = 8,000 + (3,000 x 2/3) = 10,000

Compute units cost for each element of manufacturing cost as follows:

Materials = $18,900/10,000 = $1.890

Labor = $44,100/10,000 = $4.410

Factory overhead = $26,250/10,000 = $2.625

Total cost per unit = $1.890 + $4.410 + $2.625 = $8.925

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