How is per-unit cost of goods manufactured calculated?
A) total prime costs divided by the number of units produced
B) period costs divided by the total number of units produced
C) total product costs divided by the number of units produced
D) total conversion costs divided by the number of units produced

Question

Quizplus · Accepted Answer

The per-unit cost of goods manufactured is calculated by dividing the total product costs by the number of units produced. This includes both the direct material and direct labor costs, as well as manufacturing overhead expenses. Period costs are not included in this calculation, as they are not directly related to the manufacturing process. Similarly, total prime costs (direct material and direct labor) and total conversion costs (direct labor and manufacturing overhead) do not provide an accurate picture of the per-unit cost of goods manufactured.

How Is Per-Unit Cost of Goods Manufactured Calculated