Procter & Gamble manufactures consumer goods in a continuous production process. During January 2025, the company incurs costs of 50 million and produces 1 million units. Due to spoilage and defects, 100,000 units were classified as abnormal losses.

Required:

• Calculate the cost per unit produced by Procter & Gamble.
• Determine the equivalent units of production considering normal and abnormal losses.
• Allocate costs to completed units and units lost using the weighted average method.
• Analyze the impact of abnormal losses on unit costs and profitability.
• Discuss strategies to minimize abnormal losses in process costing.