The cost per equivalent unit will be greater when normal losses are charged to good output than when they are charged to manufacturing overhead.

Question

Quizplus · Accepted Answer

When normal losses are charged to good output, the cost of each unit will include not only the actual cost but also the cost of the normal loss. This will result in a higher cost per equivalent unit. On the other hand, when normal losses are charged to manufacturing overhead, the cost of each unit will only include the actual cost, leading to a lower cost per equivalent unit.

The Cost Per Equivalent Unit Will Be Greater When Normal