Input costs to a process amount to $120,000. It is expected that 1,000 units of good output will be produced and that normal losses will be 200units. In fact, only 900 units of good output were produced. All losses, whether normal or abnormal can be sold for $5/unit. What is the cost per unit of good output and what is its inventory value?
This is what I did: Expect units 1000 Total Cost 120,000.00 Normal loss (200) Scrap Value (1,000.00) 800 119,000.00 Cost Per unit = 119,000/800. = 148.75 Actual Output value is = 900* 148.75 = 133,875 Abnormal Gain: 100 Units * 148.75 = 14,875.00 Scrap Value : 100 Units * 5 = (500.00) 14,375.00