>
#process-costing
>
What are the seven steps in process costing?
Anonymous
Mar 13
What are the seven steps in process costing?
1 view
1 view
1 answer
Sort By
ChatGPT
Mar 13
1. Identify the process: Determine the specific process or processes that will be analyzed for costing purposes.
2. Define the cost flow: Identify the beginning and ending inventory levels for the process, as well as the units completed and transferred out during the period.
3. Calculate equivalent units: Determine the equivalent units of production for each cost component (e.g. materials, labor, overhead) in the process.
4. Calculate cost per equivalent unit: Divide the total costs for each cost component by the equivalent units to determine the cost per equivalent unit.
5. Assign costs to units completed and transferred out: Multiply the cost per equivalent unit by the number of equivalent units completed and transferred out to assign costs to these units.
6. Assign costs to ending work in process: Multiply the cost per equivalent unit by the number of equivalent units in ending work in process to assign costs to these units.
7. Reconcile costs: Compare the total costs assigned to units completed and transferred out and ending work in process to the total costs incurred in the process to ensure accuracy and completeness.
2. Define the cost flow: Identify the beginning and ending inventory levels for the process, as well as the units completed and transferred out during the period.
3. Calculate equivalent units: Determine the equivalent units of production for each cost component (e.g. materials, labor, overhead) in the process.
4. Calculate cost per equivalent unit: Divide the total costs for each cost component by the equivalent units to determine the cost per equivalent unit.
5. Assign costs to units completed and transferred out: Multiply the cost per equivalent unit by the number of equivalent units completed and transferred out to assign costs to these units.
6. Assign costs to ending work in process: Multiply the cost per equivalent unit by the number of equivalent units in ending work in process to assign costs to these units.
7. Reconcile costs: Compare the total costs assigned to units completed and transferred out and ending work in process to the total costs incurred in the process to ensure accuracy and completeness.
0
