Ch 17 Flashcards
Job costing system
Individual jobs use different quantities of production resources
Identifiable units
Precession costing system, definition, equation?
Assigning total cost to many identical or similar units
Of output
Process costing unit cost =
total costs incurred/units of output from production
Conversion costs
All manufacturing costs other than direct materials costs
How do the process costing systems separate costs into cost categories?
When costs are introduced into the process
Two cost classifications for process costing systems?
Direct materials and conversion costs
In process costing systems how are conversion costs accounted for when inventory is complete, partially complete?
When complete total conversion costs are factored into
the period
When partially completed, conversion costs are estimated
Towards what has been completed and applied toward the
Period
5 steps of process costing?
1 summarize flow of physical units of output
2 compute output in terms of equivalent units
3 summarize total costs to account for
4 compute cost per equivalent unit
5 assign total costs to units completed And to units in
Ending work in process
Step 1 track physical units of output?
The physical units column tracks where physical units
came from (ex 400 units started) and where they went
(175 units completed and transferred, 225 units in ending inventory)
equivalent units 2 purposes?
Derived amount output units:
1) takes quantity of each input in units complete
And in incomplete units of work in process
2) converts quantity of input into amount of completed
Output units that could be produced with input quantity
Difference btw process-costing systems and job-costing systems journal entries?
Similar, except in process costing there is one Work in
Process account for each process
Weighted average process-costing method definition?
Calculates cost per equivalent unit of all work done to date
Regardless of accounting period in which was done
And assigns cost 1)To equivalent units completed and
transferred out of the process, and to 2) equivalent units
In ending work in process inventory
Weighted average cost equation?
Weighted avg. cost =
total costs Work in process acct./total equivalent units work done
Weighted average method process costing
Step 2: compute output in terms of equivalent units, equation?
Which part of the equation is easier to calculate?
Equivalent units in beginning work in process +
Equivalent units of work done in period
=
Equivalent units competed and transferred out in current period +
Equivalent units in ending work in process
(note easier to calculate using bottom of equation?
