Chapter 6, Problem 1Q

Under what conditions may the unit costs of materials, labor, and overhead be computed by using only one equivalent production figure?

To determine

Explain the condition under which the unit cost of materials, labor, and overhead is calculated by using only one equivalent production.

Explanation of Solution

While the materials, labor and overhead are into the continuous process or in the equivalent flow. At that time only the unit cost of materials, labor and overhead is calculated by using only one equivalent production figure.