Process Costing Basics
What is the system used to allocate costs to identical products?
Process costing system
EUP measures partially completed units in terms of what?
Fully completed units
Step 1 of the production cost report is to what?
Costs received from a previous department are called what?
Transferred-in costs
Method that combines beginning inventory costs with current costs.
The weighted-average method
Inventory containing partially completed goods.
Work-in-process Inventory
8000 units that are 50% complete in conversion equal how many EUP?
4000 equivalents units
Step 2 of the production cost report is to what?
Compute the equivalent units of production
Transferred-in costs are always how much percent complete?
100%
FIFO method
What are the costs consisting of direct labor plus manufacturing overhead?
Conversion costs
Direct materials and what cost category require separate EUP calculations?
Conversion costs
Step 3 of the production cost report is to what?
Compute cost per equivalent unit
Inventory account that receives completed production is called what?
Finished goods inventory
What is the account debited when raw materials are purchased?
Raw materials inventory
A process/department
If materials are added at the beginning, what percent of ending WIP materials are complete?
100%
Step 4 of the production cost report is to what?
Assign costs to completed units and ending WIP
Account used after finished goods are sold.
Cost of goods sold
What account is used to accumulate indirect production costs?
Manufacturing overhead
The main purpose of process costing is to calculate this for products.
Cost per unit
10000 units at 100% materials and 25% conversion. What are the EUP values?
10000 materials EUP and 2500 conversion EUP.
Units to account for equals beginning WIP plus what?
Units started or transferred in
The cutting department receives units from which department?
Assembly department
When overhead applied differs from actual overhead, what adjustment is required?
Adjusting manufacturing overhead (over/underapplied overhead)