Chapter 6 Flashcards
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.
Equivalent Units
A report that summarizes the physical units and equivalent units of a department, the costs incurred during the period, and the costs assigned to units completed and to units in ending Work-in-Process Inventories.
Production Cost Report
True or False
The FIFO method includes both costs incurred during the current period and costs incurred during the prior period that are shown as the beginning Work-in-Process Inventory of the current period.
False
Name the two categories of unit totals that must be equal in Step #1 of process costing.
Input Units
Output Units
Name the two categories of units that are totaled to determine the input units.
Units in beginning Work-in-Process
Units Started
Name the two categories of units that are totaled to determine the output units.
Units Completed and Transferred Out
Units in Ending Work-in-Process
True or False
Step #1 of process costing is identical for the Weighted-Average and FIFO methods.
True
True or False
Step #2 of process costing is identical for the Weighted-Average and FIFO methods.
False
Name Step #1 of process costing.
Analyze physical flow of units
Name Step #2 of process costing.
Calculate equivalent units for each cost element.
Name Step #3 of process costing.
Determine total costs for each cost element.
Name Step #4 of process costing.
Compute cost per equivalent unit for each cost element.
Name Step #5 of process costing.
Assign total costs to completed units and partial units.
Name the categories of units that are totaled to determine the total equivalent units for the Weighted-Average method.
Units Completed and Transferred Out
Units in Ending Work-in-Process
Name the categories of units that are totaled to determine the total equivalent units for the FIFO method.
Equivalent Units to Complete Beginning Work-in-Process
Units Started and Completed
Equivalent Units in Ending Work-in-Process
True or False
Step #3 of process costing is different for the Weighted-Average and FIFO methods.
False
Name the two categories of costs that are totaled to determine the total manufacturing costs.
Cost in Beginning Work-in-Process
Costs Added During the Period
True or False
Step #4 of process costing is different for the Weighted-Average and FIFO methods.
True
State the computation to determine the cost per equivalent unit for the Weighted-Average method.
Total manufacturing cost for the cost element divided by the total equivalent units for the cost element.
State the computation to determine the cost per equivalent unit for the FIFO method.
Costs added during the period for the cost element divided by the total equivalent units for the cost element.
The key difference between the Weighted-Average and FIFO methods is the handling of the partially completed units in the _____ account.
Beginning Work-in-Process Inventory
The calculations in the _____ method are simpler.
Weighted-Average
The _____ method is most appropriate when Work-in-Process Inventory is relatively small, or direct materials prices and conversion costs are stable.
Weighted-Average
The _____ method is most appropriate when direct materials prices, conversion costs, or inventory levels fluctuate significantly.
FIFO
A costing method that charges current production costs (using standard unit costs) directly to finished goods inventory or directly to Cost of Goods Sold.
Backflush Costing
Name the 2 approaches used to account for normal spoilage in process costing.
- Prepare a separate equivalent unit computation for the number of spoiled units and allocate the costs separately.
- Include the spoilage cost in total manufacturing costs by omitting the spoiled units from the equivalent unit computation.
