Anthony Burkhardt's Ch21-PowerPoint

To equivalent units are the sum of the work performed

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Unformatted text preview: pressed in terms of fully completed units. output, – are determined by applying the percentage of work done are to the physical units of output. to • Equivalent units are the sum of the work performed to: are – Finish the units of beginning work in process inventory. Finish – Complete the units started into production during the period. – Start, but only partially complete, the units in ending work in process inventory. process Two important terms: (1) Prime costs = DM + DL (2) Conversion Costs = DL + Man. O/H (2) • Chapter 21-8 Equivalent Units – Weighted Average Method Equivalent Units – Weighted Average Method C o ns id e rs th e d e g re e o f c o m p le tio n (weighting) of units completed & transferred out and units in ending WIP Most widely used method Beginning WIP is not p a rt o f c o m p u ta tio n o f e q u iva le nt u nits Ba s ic Eq u a tio n : Fo r Ma t’ls : Fo r C .C . : Chapter 21-9 Activity-Based Costing (ABC) -- Appendix Activity-Based Costing (ABC) Appendix An o ve rh e a d c o s t a llo c a tio n s ys te m th a t fo c us e s o n a c tivitie s p e rfo rm e d in p ro d u c ing a p ro d uc t. Traditional Costing System: a llo c a te s o ve rh e a d to p ro d u c ts us in g p re d e te rm ine d un it­b a s e d o u tp ut ra te (d o n e in C h a p te r 2 0 ) . ABC System: a llo c a te s o ve rh e a d to m ultip le a c tivity c o s t p o o ls a nd a s s ig n s c o s t p o o ls to p ro d u c ts us ing C o s t Drive rs th a t re p re s e nt a c tivitie s u s e d . Assumptions of ABC: All o ve rh e a d c o s ts fo r a n a c tivity m us t h a ve th e s a m e c o s t d rive r a nd s h o u...
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This document was uploaded on 03/23/2014.

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