CA Intermediate · Cost and Management Accounting · Unit & Batch Costing
Batch costing: a batch of 200 units has total cost Rs 84,000. During production 10 units were rejected as normal loss with no scrap value. What is the cost per good unit?
With 10 units lost as normal loss and no scrap value, the whole batch cost of Rs 84,000 is spread over 190 good units, giving about Rs 442.11 per unit. Dividing by 200 would ignore the normal loss.
- ARs 442.11Correct
- BRs 420.00
- CRs 400.00
- DRs 462.00
Explanation
Good units = 190. Cost per good unit = 84,000/190 = Rs 442.11. Rs 420 divides by 200 and ignores the normal loss.
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