ADMN 3121H Lecture Notes - Lecture 7: European Cooperation In Science And Technology, Opportunity Cost, Execution Unit
30 Mar 2020
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Lecture 7 chapter 17 process costing. Conversion costs are added equally along the production process: conversion costs are all other costs than direct materials which include manufacturing labour, indirect materials and all other indirect costs. Equivalent units are calculated separately for each input (dm and conversion costs) Weighted-average: assigns the equivalent-unit cost of work done to date to eu completed and transferred out of the process and to eu in ending wip inventory. First-in, first-out (fifo: assigns the costs of prior accounting period"s eu that is in the beginning wip inventory to the first. Eus completed and transferred out in the current accounting period. If any of the following conditions are present then there is no material difference between weighted-average and fifo methods: small (or non-existent) amounts of wip inventories, the amounts of wip are constant from period to period. Case 1: no beginning inventory or ending inventory wip. Case 2: no beginning inventory wip but an ending inventory wip.
