ECONOMICS

Detailed explanation-1: -To determine per unit cost of a product, you first have to calculate the total manufacturing cost of all the items manufactured during the given period. Then, divide the estimated value by the number of items. The end figure you obtain is one unit’s manufacturing cost.

Detailed explanation-2: -Calculate cost per unit: Divide the total cost by the number of units. This calculation includes both completed units and equivalent units. So, if a business completed 4, 000 products and another 1, 000 units got halfway through production, the applicable costs would be divided by 4, 000 + (1, 000/2) = 4, 500 units.

Detailed explanation-3: -Normal Output = Units introduced – Units of normal loss Normal Cost of Normal Output = Total Cost – Scrap value of Normal Loss.