The cheese maker Mirandol produces 20,000 units cheese wheels, its main product; the same process generates whey, an immaterial by-product. The process costs for the period amount to 495,000, of which 15,000 relates to milk lost following a refrigeration failure, a loss considered abnormal. Mirandol measures the whey at its net realisable value, estimated at 30,000, and deducts that amount from the cost of the main product. Compute the total cost of the cheese wheels and their unit cost.
- Process costs for the period
- 495,000
- Milk lost (abnormal loss)
- 15,000
- Net realisable value of the whey
- 30,000
- Number of wheels produced
- 20,000