How to calculate cost per equivalent unit?
Understand the Problem
The question is asking for the method to calculate the cost per equivalent unit, which is typically used in cost accounting to determine the cost associated with producing a product, considering the degree of completion of work in progress.
Answer
Divide total costs by total equivalent units.
The final answer is obtained by dividing total costs by total equivalent units.
Answer for screen readers
The final answer is obtained by dividing total costs by total equivalent units.
More Information
The cost per equivalent unit is an essential metric in process costing that helps to allocate costs uniformly across all units produced, whether fully or partially completed.
Tips
A common mistake is to overlook either the beginning work in process or the costs added during the period, which can lead to inaccurate calculations.
Sources
- How to Compute Equivalent Units in Cost Accounting - Dummies - dummies.com
- Cost Per Equivalent Unit (Weighted Average) Example - YouTube - youtube.com
- 4.4 The Weighted Average Method - GitHub Pages - saylordotorg.github.io
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