ECONOMICS

Detailed explanation-1: -A unit cost calculated in costing system, by assigning total costs incurred to many similar units is categorized as process costing system. Process costing is a type of operation costing which is used to ascertain the cost of a product at each process or stage of manufacture.

Detailed explanation-2: -A unit cost is a total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service. Unit costs are synonymous with cost of goods sold (COGS). This accounting measure includes all of the fixed and variable costs associated with the production of a good or service.

Detailed explanation-3: -The cost per unit is derived from the variable costs and fixed costs incurred by a production process, divided by the number of units produced.

Detailed explanation-4: -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-5: -Under weighted average process-costing, the unit cost is based on cost of opening inventory that is added to the cost of current period. In addition, there is no distinction made between the opening inventory and purchases of inventory in the current period in order to provide overall average cost per unit.