Unit product costs can be used to measure operating income and determine the cost of Finished Goods Inventory.

Question

Quizplus · Accepted Answer

Unit product costs are calculated by dividing the total cost of production by the number of units produced. This cost includes direct materials, direct labor, and manufacturing overhead. By using unit product costs, a company can determine the total cost of goods sold, as well as the cost of finished goods inventory. This information can be used to measure operating income and make strategic decisions about pricing, production, and inventory management.

Unit Product Costs Can Be Used to Measure Operating Income