Key Terms V Flashcards
Cost reconciliation
The part of a production report that shows what costs a department has to account for during a period and how those costs are accounted for
Equivalent units
The product of the number of partially completed units and their percentage of completion with respect to a particular cost
Equivalent units of production
The units transferred in the next department during the period plus the equivalent units in the departments ending work in progress stock
FIFO method
A method of accounting for cost flows in a process costing system in which equivalent units and unit costs relate only to work done during the current period
Operation costing
A hybrid costing system used when products are manufactured in batches and when the products have some common characteristics and some individual characteristics. This system handles materials the same as in job-order costing and labour and overhead the same as in process costing
Process costing
A costing method used in situations where essentially homogeneous products are produced on a continuous basis
Processing department
Any location in an organisation where work is performed on a product and where materials, labour or overhead costs are added to the product
Production report
A report that summarises all activity in a departments work in progress account during a period and that contains three parts: a quantity schedule and a computation f equivalent nits, a computation of total and unit costs, and a cost reconciliation
Quantity schedule
The part of a production report that shows the flow of units through a department during a period and a computation of equivalent units
Transferred-in costs
The cost attached to products that have been received from a prior processing department
Weighted-average method
A method of process costing that blends together units and costs from both the current and prior period
