chapter 6 Flashcards
job order costing
many diff jobs are worked on during each period
are costs accumulated by …. in job order costing
accumulated by indidivual job
the … is key document in job order costing
job cost sheet
units costs are computed by … on the job cost sheet for job order costing
job
process costing
a single product is produced either on a continuous basis or in long production runs. All units of product are identical.
cost are …. during an accouting period for process costing
accumulated by department
the … is the key document in process costing
department production report
unit costs are computed by … on dep production report for process costing
department
equivalent units of production
partially completed units x percentage completion
calculated for each department
direct labour and manufacturing overhead may be combined into one classifiaction of product cost called
conversion costs = direct labour + manufacturing overhead
2 ways to calculate equivalent units
weighted average method
fifo
weighted average method
no distinction between work done in prior or current periods
blends together units and costs from prior and current periods
for weighted avergae method, cost per equivalent unit equation =
costs for the period / equiv units of production for the period
equiv units of production always =
units completed and transferred + equiv units remaining in WIP
production report steps using weighted average
- schedule showing flow of units and the computation of equiv units
- computation of cost per equiv unit
- cost reconcillation of all cost flows into and out of department
is fifo or weighted average mentjod more accurate?
fifo
2 ways fifo differs from weighted average method
computation of equiv units
costs in beg inv are treated in cost reconcillation report
equiv units computation for fifo
- find units completed and transferred out
- add equiv units of prod in ending WIP inv to the units cvompleted and trasnferred out
- subtract beginning equiv units WIP inv from sum of step 1 and 2
