Assume that a value stream in Elite Company has two products with material costs of $40,000 and $80,000 for a given week.The conversion costs for the week amounted to $360,000.The units produced for the first product are 21,000 with 20,000 shipped to customers.For the second product, 40,000 units were produced and shipped.Calculate the cost per unit for the first product.(Note: Round to two decimal places.)

Question

Quizplus · Accepted Answer

Unit Cost = Unit Materials Cost* + Average Unit Conversion Cost**
Unit cost for the first product = $2.00 + $6.00 = $8.00 per unit
* Unit Materials Cost = Actual Materials Cost / Units Shipped = $40,000 / 20,000 units shipped = $2.00
** Average Unit Conversion Cost = Total Actual Conversion Costs / Units Shipped =
$360,000 / (20,000 units + 40,000 units) = $6.00

Assume That a Value Stream in Elite Company Has Two