Ch 4

Managerial Accounting: Creating Value in a Dynamic Business Environment

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Ch 4 Process Costing and Hybrid Product Costing Systems Chapter Overview I. Comparison of Job-Order Costing and Process Costing  A. Purpose of product-costing systems B. Differences in manufacturing environments C. Differences in cost accumulation  D. Similarities in cost flows II. Equivalent Units in Process-Costing Systems  A. Stage of completion of the work-in-process ending inventory B. Equivalent-unit calculations 1. Conversion cost  2. Direct materials III. Illustration of Reporting in a Process-Cost System  (Exhibit 4-9) A. The departmental production report B. Weighted-average method  C. Steps in preparing the departmental production report 1. Analysis of physical flow of units:
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Unformatted text preview: BI + Units Started = Total units to acct for Units completed and Transferred + Ending WIP = Total units acted for 2. Calculation of equivalent units Direct Materials Conversion Costs Total 3. Computation of equivalent-unit costs 4. Analysis of total costs IV. Other Issues in Process Costing A. Actual versus normal costing Actual costing : DM (actual) + Direct labor (actual) + MOH (actual) N ormal costing : DM (actual) + Direct labor (actual) + MOH (applied) B. Using a cost driver other than direct labor E.g. Machine hours V. A Hybrid Product-Costing System: Operation Costing for Batch Manufacturing...
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