Conversion costType of Product Cost Conversion Direct Materials Direct labor Manufacturing overhead... Equivalent Units of ProductionTwo half completed products are equivalent to one com
Trang 1Topic 2
Trang 2Conversion cost
Type of Product Cost
Conversion
Direct Materials
Direct labor
Manufacturing overhead
Trang 3Processing departments
Trang 4Equivalent Units of Production
Two half completed products are equivalent to one completed product.
So, 10,000 units 70 percent complete are equivalent to ??? complete units.
So, 10,000 units 70 percent complete are equivalent to ??? complete units.
Trang 5Weighted-average method vs FIFO
method
Weighted-average
FIFO
Trang 6Weighted Average Method
Equivalent units of production always equals:
Units completed and transferred
+ Equivalent units remaining in ending
work in process
Equivalent units of production always equals:
Units completed and transferred
+ Equivalent units remaining in ending
work in process
Trang 7Equivalent Units of Production –
FIFO Method
Equivalent units of production always equals:
Units completed and transferred
+ Equivalent units remaining in ending
work in process
- Equivalent units remaining in beginning
work in process
Equivalent units of production always equals:
Units completed and transferred
+ Equivalent units remaining in ending
work in process
- Equivalent units remaining in beginning
work in process
Trang 8unit – weighted average
Cost per
equivalent
unit
= Equivalent units of work done to date Costs incurred to date
Trang 9Calculating cost per equivalent
unit – FIFO
Cost per
equivalent
unit
= Equivalent units of work done in Costs added in current period
current period
Trang 10Operation costing
• Is a hybrid costing system: a mix of
Job-order costing and Process costing.
characteristics and some individual
characteristics.
Trang 11End of Topic 2