Acc 405 process costing
Steps in process costing (FIFO)
1. Analyze the flow of physical units through the department 2. Calculate equivalent units of production for the units of beg WIP that ate completed, the started and completed units, spoilage and ending WIP 3. Determine total costs to account for 4. Compute unit costs 5. Assign total manufacturing costs
Steps in process costing (weighted-average)
1. Analyze the flow of physical units through the department. 2. Calculate the equivalent units of production for completed units, spoiled units and ending WIP 3. Determine total costs to account for 4. Compute unit costs 5. Assign total manufacturing costs
In process costing, costs are
Accumulated in processing departments and each unit is assigned the average cost of units processed through the department
Equivalent units
Are the number of the same or similar complete units that could have been produced given the amount of work actually performed on both complete and partially complete units
In process costing, a separate
Departmental production report is compiled for each processing department. This report provides the details of how costs are assigned to units that pass through the department
Weighted-average
Includes both current period costs and prior period costs( beg WIP) in calculating unit costs
FIFO
Includes only current costs and work done in the current period in calculating unit costs. Costs (and work done) during earlier periods (beg WIP) are tracked separately
Process costing
Is a cost accumulation system for mass produced identical goods
Units to account for
Refers to the sum of the beginning inventory units and the number of units started during the period
Units accounted for
Refers to the sum of the units completed and transferred out plus ending inventory units
In process costing, production is
Standardized so all products going through a department are treated the same
Production cost report
Summarizes the physical units and equivalent units of a department, the costs incurred during the period, and the costs assigned to both units completed and ending work in process incentories
Types of processing methods
Weighted-average method and FIFO method
