3.18 may%2018%20%26%2020%20ch%2014

3.18 may%2018%20%26%2020%20ch%2014 - ACIS222 Process...

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ACIS222 Process Costing Reading: Eldenburg et al. Chapter 14
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Ch14- Ch14- 2 Key topics Assigning costs to mass-produced products Equivalent units Calculating product costs using the weighted average method Multiple production departments Uses and limitations of process costing
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Ch14- Ch14- 3 Process Costing homogeneous products costs accumulated by process or department unit cost computed by dividing process costs of the period by the units produced in the period
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Sequential processing e.g., making tinned soup Process 2: Cooking Process 3: Canning Process 1: Preparing
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Ch14- Ch14- 5 Basic characteristics of process manufacturing 1. Homogeneous units pass through a series of similar processes. 2. Each unit in each process receives a similar dose of manufacturing costs. 3. Manufacturing costs are accumulated by process for a given period of time. 4. Manufacturing cost flows and the associated journal entries are generally similar to job-order costing
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Ch14- Ch14- 6 5. The departmental production report is the key document for tracking manufacturing activity and costs 6. Unit costs are computed by dividing the departmental costs of the period by the output of the period. 7. Output of the period is measured in equivalent units, not in units produced.
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Parallel processing e.g., electronics Process 1 Process A Process 2 Process B Process X Process Y Process 1 Process 2 Process R Process D Process S Process E
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Ch14- Ch14- 8 Example 1: No beginning work in process Data for July - Department A 20 000 Ending inventory (60% complete) 5 000 Manufacturing costs incurred $46 000 Beginning inventory 0 WIP ٨
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3.18 may%2018%20%26%2020%20ch%2014 - ACIS222 Process...

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