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PROCESS COSTING (Average and FIFO Method) : Units To Account For

This document outlines the process for calculating costs using average and FIFO costing methods in a manufacturing environment. It discusses: 1) Tracking units started, completed, transferred in/out, and remaining in work in process. 2) Calculating equivalent units of production using percentage complete or FIFO assumptions. 3) Accounting for total costs including direct materials, conversion costs, and beginning inventory. 4) Determining a cost per equivalent unit. 5) Ensuring total costs accounted for equal the starting costs plus any additional costs incurred.

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52 views2 pages

PROCESS COSTING (Average and FIFO Method) : Units To Account For

This document outlines the process for calculating costs using average and FIFO costing methods in a manufacturing environment. It discusses: 1) Tracking units started, completed, transferred in/out, and remaining in work in process. 2) Calculating equivalent units of production using percentage complete or FIFO assumptions. 3) Accounting for total costs including direct materials, conversion costs, and beginning inventory. 4) Determining a cost per equivalent unit. 5) Ensuring total costs accounted for equal the starting costs plus any additional costs incurred.

Uploaded by

Douzo plays
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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PROCESS COSTING( Average and FIFO Method)

1. Beginning Work in process


Started-in/ Transferred-in
Units to account for

Completed and transferred out


EQUAL
Ending Work in process
Lost(if any)
Units accounted for

2.
Equivalent Units Production

Completed and transferred out Beginning Work in process x % uncomp


Plus: Ending Work in process x % comp or Plus:Started and completed
Weighted Average- EUP Plus:Ending Work in process x % comp
Less: Beginning Work in process x % comp First-in, First-out -EUP
First-in, First-out -EUP

To compute for Started and completed units

Started-in/ Transferred-in Completed and transferred out


Less: Ending Work in process or Less: Beginning Work in process
Less: Lost(if any) Started and completed
Started and completed

3. Total cost to be accounted for


Direct Conversion
Started in Total
Material Cost
Beginning inventory cost XX XX XX XX
Plus: Current cost XX XX XX XX
Total cost to be accounted for XX XX XX XX

4. Cost Per EUP


Weighted Average First in, First out
Beginning inventory cost Current cost
Plus: Current cost Divided by:FIFO-EUP
Total cost Cost Per EUP
Divided by:WA-EUP
Cost Per EUP
5. Cost to be accounted must equal total cost accounted for
Cost Accounted for

Completed and transferred out


Weighted Average FIFO
Completed and transferred out nd
(given, if 2 dept)
xx Beginning inventory cost(given) xx
(completed units x Total cost per EUP)
Plus: Conversion cost to complete
(BWIP x % uncomplete x cost per EUP) xx
Plus: Started and completed
xx
(Started and completed units x total cost per EUP)
Completed and transferred out xx Completed and transferred out xx

Ending Work in process


Weighted Average FIFO
Started in EUP Started in EUP
xx xx
(EWIP EUP x cost per EUP) (EWIP EUP x cost per EUP)
Direct material EUP Direct material EUP
xx xx
(EWIP EUP x cost per EUP) (EWIP EUP x cost per EUP)
Conversion Cost EUP Conversion Cost EUP
xx xx
(EWIP EUP x cost per EUP) (EWIP EUP x cost per EUP)
Ending Work in process Ending Work in process xx

Completed and transferred out xx Completed and transferred out xx


Plus: Ending Work in process xx Plus: Ending Work in process xx
Total Cost Accounted for xx Total Cost Accounted for xx

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