Topic 2 ENGLISH ACCOUNTING

Process Costing Topic 4-2 Conversion cost Direct Materials Conversion Dollar Amount Direct labor Manufacturing overhead Type of Product Cost 4-3 Processing departments 4-4 Equivalent Units of Production Two half completed products are equivalent to one completed product + = So, So, 10,000 10,000 units units 70 70 percent percent complete complete are are equivalent equivalent to to ??? ??? complete complete units units 4-5 Weighted-average method vs FIFO method Weightedaverage FIFO 4-6 Equivalent Units of Production – Weighted Average Method Equivalent Equivalent units units of of production production always always equals: equals: Units Units completed completed and and transferred transferred + + Equivalent Equivalent units units remaining remaining in in ending ending work work in in process process 4-7 Equivalent Units of Production – FIFO Method Equivalent Equivalent units units of of production production always always equals: equals: Units Units completed completed and and transferred transferred + + Equivalent Equivalent units units remaining remaining in in ending ending work work in in process process Equivalent Equivalent units units remaining remaining in in beginning beginning work work in in process process 4-8 Calculating cost per equivalent unit – weighted average Cost per equivalent unit = Costs incurred to date Equivalent units of work done to date 4-9 Calculating cost per equivalent unit – FIFO Cost per equivalent unit = Costs added in current period Equivalent units of work done in current period 4-10 Operation costing • Is a hybrid costing system: a mix of Joborder costing and Process costing • Used when products have some common characteristics and some individual characteristics 4-11 End of Topic ...4 -2 Conversion cost Direct Materials Conversion Dollar Amount Direct labor Manufacturing overhead... when products have some common characteristics and some individual characteristics 4-11 End of Topic