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the following information relates to a company polishing process for the previous period
output to finished goods 5408 units valued at $29744
normal loss 276 units
actual loss 112 unitsall losses have a scrap value of $2.50 per unit and there was no opening or closing work in progress
the value of the input during the period was?
I have a question about the calculation of a unit of output is $29,744/5,408 = $5.50
As we know we should divide the cost by the expected output… We should assume that this given number of units (5408) is the expected output right? I am a little bit confused here…
The expected output is not 5,408. There is a normal loss of 276 units and therefore they were expecting the output to be higher.
How do you know that they were expecting higher output?
Why they don’t divided on expected output instead of actual output?
Sorry, ignore my previous answer.
The question says that the actual output was 5,408. It also says that these units have ben valued at $29,744.
Therefore they must have been valuing each unit at 29,744/5,408 = $5.50
How they calculated a value of $5.50 per unit is not relevant.
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