Note re FIFO Method

Note re FIFO Method - SUPPLEMENTARY NOTES - PROCESS COSTING...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
SUPPLEMENTARY NOTES - PROCESS COSTING - CHAPTER 4 FIFO Method: Steps in Preparing Production Report The FIFO method keeps track of the units and costs in beginning WIP completely separate from the units and costs for production started this period. Only costs incurred in the current period are included in the cost per EU . Costs in WIP beginning are excluded since they were incurred in a previous period. 1. Prepare a quantity schedule showing Units to Account For (i.e, units from WIP, beginning, and units started/added this period. This schedule is identical to the schedule under the Weighted Average method. 2. Prepare a quantity schedule showing what happens to the units in 1 called a ‘Units Accounted for As Follows’ schedule. Include separate columns for DM, DL, and MO (DL and MO may be combined and transferred out, or they are still in ending WIP. The total units must be balanced to schedule 1. The Units completed and transferred out come from two sources that must be kept track of separately: - units completed from WIP beginning (same figure as in item 1.). For purposes of EU’s, we indicate the # EU’s for DM, DL, and MO that are required to complete these units (e.g., if begin WIP was 60% complete, then it would take 40% worth or EU’s to complete) - units started and completed this period. This group will always be 100% complete. The units in ending WIP will only have been partially worked on this period. Therefore, calculate the EU’s for each of DM, DL, and MO using the % completed this period times the total number of units in ending WIP. 3. Prepare a schedule of Costs to Account For with separate columns for DM, DL, and MO (or DL and MO may be combined as CC). This schedule should have similar line headings to the first quantity schedule (see item 1. above) and the costs for each category should be given in the question. While the costs in
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/03/2012 for the course ACCT 2460 taught by Professor Farrar during the Winter '12 term at Conestoga.

Page1 / 3

Note re FIFO Method - SUPPLEMENTARY NOTES - PROCESS COSTING...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online