Bpp revision kit mock 3 question 7

I have no idea what you have done wrong. The BPP answer of 3.22 per unit is correct and there is no other way of doing it.

Sir I have just taken all the cost on per unit basis.i.e Vc per unit=2.3+1.8+1.2=5.3 Fixed costs p.u=3000÷2000+3500÷5000+4000÷7000 =1.5+0.7+0.57=2.77 Variable selling cost p.u=0.5+0.4+0.4=1.3 Fixed selling costs p.u=1500÷2000+1600÷5000+1600÷7000 =0.75+0.32+0.23=1.3 Adm.cost p.u=700÷2000+700÷5000+700÷7000 =0.35+0.14+0.1=0.59 =5.3+2.77+1.3+1.3+0.59=11.26

But what you are doing does not make sense. The costs are the costs per unit each year and the total cost each year is the number of units produced each year multiplied by whatever the cost per unit was in that year.

Are they not the same thing?If u can explain it abit more it would be great because it's still not very clear to me.Sorry to trouble you again.

Suppose last year the cost per unit was $5 and this year the cost per unit is $6. That certainly does not mean that the total cost per unit is $11, which is effectively what you are doing!!!

Got it now Thank you so much sir.your explanations are justifying .

You are welcome :-)