Extras Specific To The process Account Flashcards
If there is input from Process 1 and there is output WIP.
Remember there needs to be a column for Process 1 transfer (because it’s a cost)
Remember when given what % complete WIP is in terms of each cost … might not be told that its 100% complete in terms of process 1 because this is assumed (otherwise it wouldn’t have been transferred to process 2)
So equivalent units for WIP will be total WIP units for that input/cost
Remember that when beginning with the process T-account although you see ‘normal loss’ in the Credit side and are expecting to do a row in the equivalent units for that …. you actually don’t … this is because normal loss has already been valued.. at its scrap value
Instead you just put dashes in that row and put the scrap value of the normal loss as a deduction (in brackets) in the Costs section … by convention it just gets put in the first cost column… (likely either Transfer from previous process or Materials)
So when get to final stage of valuing the outputs you don’t include the ‘normal loss’ units in the items being valued.. just FG, WIP, abnormal loss, abnormal gain get valued…
Opening WIP … how to value ….could be valued AVCO or FIFO
The opening WIP is included as an item of the input on the Debit side of the process account. (I think it’s cost should be known from the previous periods valuation?)
It’s degree of completion as input is irrelevant because we are going to average its cost over all units of output… ie it just gets lost in amongst the new output.
You put the cost of the opening WIP in the costs section.. a bit like putting the normal loss there but:
•Normal loss will be in brackets since it’s scrap value is being offset.
•With opening WIP you split the units across the different stages.
Abnormal gain … normally this goes on the Debit side of the Process T-account … but in this situation you put it on the Credit (output) side ….. but in brackets…
This is so it gets a row in the Equivalent units and a valuation
