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Dear Sir/ Madam.
I have one question which want to ask you. Please help me to answer it.
Question:
input 3000 units at the cost 45600$
normal loss 5%
actual output 2800.
calculate the cost per unit output.Answer.
Cost per unit= 45600/(3000*95%)= 16.
Is that true? Because the question has not mentioned about the scrap value so I am not sure about this answer. Can you help me to give the right answer?
Thank you.
The answer is correct.
If there is no mention of a scrap value then you assume that there is none (that the losses actually are lost 🙂 ).
The costing is done over the units we expect to produce – i.e. 3000 x 95%.
I have one more question and want to ask u.
this year output 5000 units the overhead cost $ 31000
3 years ago, output 2000 units the overhead cost $ 8800.the price index 3 years ago was 132 and this year is 164.
using high low method calculate the variable cost per unit in current year prices.Answer:
variable cost per unit= (31000-8800)/(5000-2000)= 7.4
but this is the wrong answer. Can you tell me the right way to do ?
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