1. Ford Motor Company uses process costing for its engine manufacturing process. In January 2028, the company incurs costs of $50 million and produces 10,000 engines. Normal loss during production is 5% of input materials.

Required:

• Calculate the cost per equivalent unit for materials and conversion costs.
• Determine the total equivalent units of production.
• Allocate costs to completed units and abnormal losses using the weighted average method.
• Prepare a cost of production report for Ford Motor Company.
• Analyze the impact of normal losses on unit costs and profitability.