Ferdon Inc. company started Job #4 with 32 units. 7 units were rejected upon inspection. Normal...
Ferdon Inc. company started Job #4 with 32 units. 7 units were rejected upon inspection. Normal spoilage is 5 units. Costs prior to inspection amount to $1,450 per unit and the spoiled units have a salvage value of $520 per unit.
What is the cost per unit of the good units in Job #4?
Homework Answers
Solution:
Step:1
Cost per good unit can be calculated by following way:
Cost prior to inspection amount- Salvage value of spoiled units / Number of units produced - Units rejected in inspection- Normal spoilage
Step:2
Costs prior to inspection amount = $1,450
Salvage value per unit = $520
Cost per unit of good unit:
Cost per unit of good unit= 1450 - 520/ 32-7-5
Cost per unit of good unit= 930/ 20
Cost per unit of good unit =$46.5
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Ferdon Inc. company started Job #4 with 32 units. 7 units were
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