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ORIE 350 lecture 17

ORIE 350 lecture 17 - Cost per EU Cost EU = Cost added this...

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ORIE 350 Lecture 17 Process Costing Any sequential process More than one department Each department has its own work in process inventory(WIP) From one T-account to the other Partially completed items must be accounted for The work-in-process account consists of 2 items: Materials and Conversion(labor and overhead) Equivalent Units -%completion concept is used -applied to materials and conversion separately and distinctly FIFO Equivalent Units of Production -First complete the partially completed units -then, start new units EU to finish the beginning WIP +Units started and completed +EU in ending WIP Equivalent Units of Production Note: Do it once for materials and once for conversion
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Unformatted text preview: Cost per EU Cost/ EU = Cost added this period/ EUOP Do this twice as well Cost Cost in Beginning WIP + EU to finish at beginning WIP x cost/EU +Units started and completed x cost/EU Cost of Goods Transferred Cost. Ending WIP = EU in Ending WIP x cost/ EU Do this twice Weighted Average Method EUOP Units transferred to the next department +EU in ending WIP EUOP Do twice Cost per EU =[Cost in Beginning WIP + Cost Added this period] / EUOP Do this twice Cost of Goods Transferred = Cost/ EU x No. of units transferred Cost of Ending WIP = Cost / EU x EU in ending WIP...
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