ACCT 2102 1nd Edition Lecture 8 Outline of Last Lecture II Process Costing III Conversion Costs IV Equivalent Units Outline of Current Lecture V Process Costing in the First Department VI Process Costing in the Second Department Current Lecture Process Costing in the First Department The first step for calculating Process Costing is summarizing the flow of physical units The beginning inventory and starting inventory must equal the amount in the ending inventory plus the goods completed and transferred out The second step is to compute the output in terms of equivalent units This is where you create a chart and find the ending inventory and the goods completed and transferred out in relation with Direct Materials and Conversion Costs The third step is to calculate the cost per equivalent unit by using the weighted average approach This is where you take beginning costs and add any costs added during production and divide the sum by the equivalent units from step two The final step is to assign costs to the units From step four you should receive a money amount of a cost that is associated with Direct Material and Conversion use these numbers and multiply them by the goods completed and transferred out and the ending inventory to find the total assigned costs for the period Process Costing in the Second Department These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute The formula for the second third and any other departments is almost identical to the steps listed above however another column is added in the chart in step two Direct Materials Conversion costs and goods Transferred In from the previous unit must be used to compute equivalent units This column will always have 100 completion because the units were done in the previous unit and are now readily able to be used in the current department
View Full Document
Unlocking...