Process Costing Flashcards
What is process costing used for?
Costing homgenous products
How does process costing work?
By averaging the costs over units to determine the cost per unit
How is revenue from the sale of scrap treated?
As a reduction in cost
What is WIP material cost?
Full regular input value
What is WIP conversion cost?
The apportioned value of the total conversion cost value
What are the 4 value elements of a process?
Opening WIP
Materials and conversion costs transferred into production
Transfers to the next process
Closing WIP
What are joint products?
Two or more products produced simultaneously by the same process
What are joint products?
Two or more products produced simultaneously by the same process that separate at a split-off point
What are by-products?
Products of joint processes with relatively low sales value
What are the 2 methods of allocation of joint costs?
Physical standard method
Market value approach
What are the 2 methods of accounting for by-products?
Production method
Sales method
