Anthony Burkhardt's Ch21-PowerPoint

# To equivalent units are the sum of the work performed

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

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 &amp; 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...
View Full Document

## This document was uploaded on 03/23/2014.

Ask a homework question - tutors are online