How is unit cost calculated?
A) total units divided by total costs
B) sum of all cost drivers
C) total cost divided by equivalent units produced
D) total of all costs incurred

Question

Quizplus · Accepted Answer

Unit cost is calculated by dividing total cost by equivalent units produced. This takes into account any partially completed units, as they are stated in terms of their equivalent in completed units. Option A does not consider partially completed units, option B is not a valid method for calculating unit cost, and option D does not take into account the number of units produced, which is necessary for calculating unit cost.

How Is Unit Cost Calculated