Chapter 17: Process Costing

Question 1

Equivalent units

Answer 1

Derived amount of output units that:

1. Takes the quantity of each input in units completed and in incomplete units of work in process, and
2. Converts the quantity of input into the amount of completed output units that could be produced with that quantity of input

Question 2

What is the problem set-up to find the equivalent units of work done in a period?

Answer 2

WIP, beginning

plus Units started during current period

equals Units to account for

Completed and transferred out during current period

plus WIP, ending (adjusted for percentage complete)

equals Units accounted for (Equivalent units of work done current period)

Question 3

What are the 5 steps of process costing? To clarify,

calculate the cost of fully assembled units and the cost of partially assembled units still process.

Answer 3

1. State the number of physical units of output
2. Compute output in terms of equivalent units
3. Summarize total costs to account for which are all the direct material, labor, and OH added to WIP and finished
4. Compute cost per equivalent unit
5. Assign total costs to units completed and to units in ending work in process

Question 4

Process-costing system

Answer 4

The unit cost of a product is obtained by assigning total costs to many identical units of output

or

Total costs

divided by

Number of units of output