Why do accountants normally calculate cost per unit as an average?
A) Determining the exact cost of a product is virtually impossible.
B) Minute details such as a second of labor time cannot be effectively measured.
C) Even when producing multiple units of the same product, normal variations occur in the amount of materials and labor used.
D) All of these are justifications for computing average unit costs.

Question

Quizplus · Accepted Answer

All of these are common reasons why accountants calculate cost per unit as an average. Determining the exact cost of a product is difficult, labor time is complex to measure, and variations in materials and labor can occur even within the same product line. Therefore, taking an average cost per unit provides a reasonable estimate that can help businesses make informed decisions.

Why Do Accountants Normally Calculate Cost Per Unit as an Average