bec 3 Flashcards
cost of jobs completed or cost of goods manufactured equals
Beg WIP + DM used + DL + overhead applied - end WIP
computation of total value of direct labor costs in ending inventory using the W.A method applied to process costing involves three steps
1 equivalent units of production : units completed not started only + % of completed portion of WIP end. “DL”
2 we use equivalent units of production to compute cost per unit of production we (add beg. DL + DL costs added to the period) / equivalent units of production
3 we use unit cost to % of completed units in end. inv.
total manufacturing overhead equals
DM + DL + overhead applied
overhead applied consists of
both variable overhead and fixed overhead
net charge of factory overhead
actual factory overhead - amount of overhead applied
weighted avg to calculate the cost per equivalent unit equals
( Beg cost + Current cost ) / equivalent units of production
equivalent unit of production (EQU)
( units completed + % of End. WIP completed
cost of goods manufactured equal
Beg. WIP + total manufacturing cost - End. WIP
examples of job costing which is used in the production of unique goods
.constructions of buildings and ships .aircraft assembly .printing .public accounting firm .consulting firm .repair shops .special purpose machinery
process costing for mass produced homogeneous units such as
.gasolineand oil .chemicals .steel .wallpaper .plastics .paints .flour .check clearing in banks .food preparation in fast-food .premium handling in insurance
cogs
beg of finished goods + cog manufactured -end of finished goods
compute the standard rate per driver ( machine hour)
application rate per hour = budgeted total standard costs / budgeted total standard hours
total applied overhead = total actual hours * application rate per hour
