Chapter 4 part 2

Cost per Equivalent Unit =

(Cost of Beg. WP Inventory + Cost Added During the Period) / Equivalent Units of Production

Alternate: Equivalent Units of Production =

(Works In Process End Inventory) x (%) + Units Transferred Out

Costs transferred in are always _% complete with respect to the department they came from.

100%

The equivalent units completed are treated the same as units transferred out for purposes of:

determining cost per unit.

When computing the Equivalent Units of Production under the Weighted-Average method, _ is ignored.

partially completed beginning work in process inventory

There are material costs as well as conversion costs. Both are expressed at first as:

percentages

The Costs per Equivalent Unit are used to:

value units in ending inventory and units that are transferred out to the next department.

Using the Weighted Average method, there are a total of _ equivalent units of production if Work in Process Inventory has 40 Equivalent Units and 30 units were transferred to the next department.

70

Cost of Units Transferred Out =

Cost per Equivalent Unit x Number of Units Transferred

Job-order Costing Examples

Cruise ships

Raw Materials were issued: $5 for Dept. A and $10 for Dept. B. What are the journal entries?

Debit: Works in Process Dept. A: $5 Debit: Works in Process Dept. B: $10 Credit: Raw Materials: $15

Conversion cost =

Direct Labor Cost + Manufacturing Overhead Cost

Beg. WP Inv. + Units Started or Trans. In =

End. WP Inv. + Units Completed and Trans. Out

Process Costing Examples

Gasoline, flour, toothpaste

Equivalent Units of Production =

Number of Units Transferred to the next department + Equivalent Units in Ending Works in Process Inventory

Costs transferred in are treated as another category of _ just like material or conversion costs.

cost