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A company assigns overhead cost to completed jobs on the basis of 125% of direct labor cost. The job cost sheet for Job 313 shows that $10,000 in direct materials has been used on the job and that $12,000 in direct labor cost has been incurred. A total of 1,000 units were produced in Job 313. What is the unit product cost for Job 313?

Answer :

A business bases its assignment of overhead costs on completed projects at 125% of direct labour costs. According to Work 313's job cost sheet, 10,000 in direct materials and 12,000 in direct labour costs were used on the project. 1,000 units in all were created by Job 313.Unit product cost for Job 313 = $37 per unit

What is the unit product cost ?

  • A company's entire costs to create, store, and sell one unit of a specific item or service are known as the unit cost.
  • The cost of goods sold and unit costs are the same (COGS).
  • The expenses involved in producing an item or service, both fixed and variable, are all included in this accounting metric.
  • An essential cost metric in a company's operational analysis is the unit cost. An easy technique to determine whether a firm is manufacturing a product effectively is to identify and analyze the unit expenses of the company.
  • Unit costs typically describe the overall cost associated with producing one unit of a good or service.
  • Business-specific unit cost measurements for goods will differ.
  • A large company may use economies of scale to reduce unit costs.
  • The cost serves as the starting point for a market offering price and is helpful in analyses of gross profit margins.
  • Reducing unit costs and maximizing the market selling price are two ways that businesses try to maximize profit.

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