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Chapter 4 Handout

# Chapter 4 Handout - ACC200 Introduction to Managerial...

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ACC200 Introduction to Managerial Accounting Chapter 4 Handout Process Costing Problems (FIFO Method) STEP #1: From the information given, compute the following three items: # of units in beginning WIP inventory and percent complete # of units started and completed in the current period # of units in ending WIP inventory and percent complete STEP #2: Using the three items from step #1, compute the total number of equivalent units for the current period. STEP #3 Compute the cost per equivalent unit by taking the current period’s costs ÷ total EU’s (from Step #2). STEP #4: Calculate the cost of ending work in process inventory by taking the number of EU’s in ending WIP (from Step #1) and multiplying it by the cost per EU (from step #3). STEP #5: Solve for the COGM . This can be done in a couple of different ways. The easy way to do it is to simply take the beginning costs + c urrent period’s costs and subtract the costs of ending WIP from Step 4. (Note that Step 4 and Step 5 are combined in your book)

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Chapter 4 Handout - ACC200 Introduction to Managerial...

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