Duran Manufacturing uses a process costing system and manufactures its product in three departments. Which of the following is NOT a way in which Duran can use the cost per unit of each process?

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16 November, 07:16

Duran Manufacturing uses a process costing system and manufactures its product in three departments. Which of the following is NOT a way in which Duran can use the cost per unit of each process?

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Essence · Answer 1

The cost per unit is calculated by combining the variable costs and the fixed costs that you have amassed by the production process and then dividing that by the amount of units that have been produced. Therefore Duran can only use the cost per unit of each process if all units are fully completed at the end of the accounting period, and not before that.