Sample question - process costing

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Reference no: EM1366831

Sample Question: Process Costing

Iceland Company uses JIT manufacturing; several manufacturing cells are set up within one of its factories. One of the cells makes space heaters; the cost of production for the month of March is as follows:

Cell labor $ 20,000

Direct materials 50,000

Overhead 40,000

Total $110,000

During the March, 10,000 space heaters were produced and sold.

1. Explain why process costing can be used for computing the cost of production for space heaters

2. Calculate the cost per unit for a space heater

Reference no: EM1366831

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