Kế toán, kiểm toán - Chapter 4: Process costing and hybrid product - costing systems

Chapter 4Process Costing and Hybrid Product-Costing Systems Comparison of Job-Order Costing and Process CostingProcessCostingProcessCostingJob-orderCosting Used for production of small, identical, low cost items. Mass produced in automated continuous production process. Costs cannot be directly traced to each unit of product.Job-order costingCosts accumulated by the job.Work in process has a job-cost sheet for each job.Many unique, high cost jobs.Jobs built to customer order.Process costingCosts accumulated by department or process.Work in process has a production report for each batch of products. A few identical, low cost products. Units continuously produced for inventory in automated process.Comparison of Job-Order Costing and Process CostingProcess Cost FlowsProcess Cost FlowsEquivalent Units: A Key ConceptCosts are accumulated for a period of time for products in work-in-process inventory. Products in work-in-process inventory at the beginning and end of the period are only partially complete. Equivalent units is a concept expressing these partially completed products as a smaller number of fully completed products.Calculating and Using Equivalent Units of ProductionTo calculate the cost perequivalent unit for the period:Cost perequivalent unit=Costs for the periodEquivalent units for the periodCalculating and Using Equivalent Units of ProductionTo calculate the direct materials and conversion costs per equivalent unit for the period:Materials cost perequivalent unit=Materials cost for the periodMaterials equivalent units for the periodMaterials cost perequivalent unit=Materials cost for the periodMaterials equivalent units for the periodDepartmental Production ReportProductionReport Analysis of physical flowof units. Calculationof equivalent units. Computationof unit costs. Analysis of total costs.Equivalent Units of Production –Weighted-Average MethodThe weighted-average method . . .Makes no distinction between work done in the prior period and work done in the current period.Blends together units and costs from the prior period and the current period.The FIFO method is a morecomplex method and israrely used in practice.Computation of Unit Costs$140,000 ÷ 50,000 equivalent units$200,700 ÷ 45,000 equivalent units$2.80 + $4.46Analysis of Total CostsSlide 1 of 3 All costs accounted forDepartmental Production Report Analysis of physical flowof units. Calculationof equivalent units. Computationof unit costs. Analysis of total costs.Operation CostingOperation costing employs some aspectsof both job-order and process costing.Job-order Operation Costing Process Costing (Products produced in batches) CostingConversion costsassigned to batchesas in process costing.Material Costs chargedto batches as injob-order costing.