Process Costing

PROCESS COSTING Weighted Average FIFO Cost flow

Finished Goods AssemblingAssemblingCuttingCutting Sequential Processing Parallel Product Flow Selective Product Flow

Five Steps in Process Costing Step 1: Summarize the flow of physical units of output. Step 1: Summarize the flow of physical units of output. Step 2: Compute output in terms of equivalent units. Step 2: Compute output in terms of equivalent units. Step 3: Compute equivalent unit costs. Step 4: Summarize total costs to account for. Step 5: Assign total costs to units completed and to units in ending work in process inventory. Step 5: Assign total costs to units completed and to units in ending work in process inventory.

Weighted average method

Step 1: Summarize the flow of physical units of output. CUTTINGASSEMBLING Work in process, beginning Started during current period in Cutting Dept. 600 Completed and transferred out during current period to Assembling Dept. 500 Started during current period in Assembling Dept. 500 Completed and transferred out during current period to Finish Goods. 580 Work in process, ending

Concept: 100 units completed = 100 equivalent units 200 units, 50% completed = 100 equivalent units = = Step 2: Compute output in terms of equivalent units.

Step 2: Compute output in terms of equivalent units (Cont’d) CUTIING DEPT.DMDLFOH Work in process, beginning80%40%60% Work in process, ending60%20%40% ASSEMBLING DEPT.DMDLFOH Work in process, beginning40%20% Work in process, ending100%70%

Step 2: Compute output in terms of equivalent units (Cont’d) Equivalent Units:DMDLFOH Completed and transferred out 500 Work in process, ending Total Equivalent Units CUTTING DEPT.

Step 3: Compute equivalent unit costs Cost ($)CUTTINGASSEMBLING WIP, Begining: Cost From Previous Dept: 8,320 Direct Materials 1, Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials 13,6087,296 Direct Labor 5,0009,210 Factory Overhead 7,90411,052

Step 3: Compute equivalent unit costs (Cont’d) CUTTING DEPT. Equivalent Units:DMDLFOH Cost From Beginning WIP Invent. 1, Cost Aded During Current Periods 13,6085,0007,904 Total Cost To Accounted For 15,5005,4008,700 Devided: Equivalent Units Cost per Equivalent Units ($)

Step 4 & 5: Summarize and Assign Total Costs CUTTING DEPT. Step 4: Total costs to account for: $29,600 Step 5: Assign total costs: Completed and transferred out: 500 × $50$25,000 Work in process, ending (200 units): Direct materials120 × $25 3,000 Direct labor 40 × $ FOH 80 × $15 1,200 Total $29,600 Completed and transferred out: 500 × $50$25,000 Work in process, ending (200 units): Direct materials120 × $25 3,000 Direct labor 40 × $ FOH 80 × $15 1,200 Total $29,600

Step 1: Summarize the flow of physical units of output. CUTTINGASSEMBLING Work in process, beginning Started during current period in Cutting Dept. 600 Completed and transferred out during current period to Assembling Dept. 500 Started during current period in Assembling Dept. 500 Completed and transferred out during current period to Finish Goods. 580 Work in process, ending

Concept: 100 units completed = 100 equivalent units 200 units, 50% completed = 100 equivalent units = = Step 2: Compute output in terms of equivalent units.

Step 2: Compute output in terms of equivalent units (Cont’d) CUTIING DEPT.DMDLFOH Work in process, beginning80%40%60% Work in process, ending60%20%40% ASSEMBLING DEPT.DMDLFOH Work in process, beginning40%20% Work in process, ending100%70%

Step 2: Compute output in terms of equivalent units (Cont’d) Equivalent Units:Cost from Prev. Dept. DMDLFOH Completed and transferred out 580 Work in process, ending Total Equivalent Units ASSEMBLING DEPT.

Step 3: Compute equivalent unit costs Cost ($)CUTTINGASSEMBLING WIP, Begining: Cost From Previous Dept: 8,320 Direct Materials 1, Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials 13,6087,296 Direct Labor 5,0009,210 Factory Overhead 7,90411,052

Step 3: Compute equivalent unit costs (Cont’d) ASSEMBLING DEPT. Equivalent Units:Cost from Prev. Dept. DMDLFOH Cost From Beginning WIP Invent. 8, Cost Aded During Current Periods 25,0007,2969,21011,052 Total Cost To Accounted For 33,3208,1269,68511,570 Devided: Equivalent Units Cost per Equivalent Units ($)

Step 4 & 5: Summarize and Assign Total Costs CUTTING DEPT. Step 4: Total costs to account for: $62,701 Step 5: Assign total costs: Completed and transferred out: 580 × $93.65$54,317 Work in process, ending (100 units): Cost from prev Dept.100 × $ ,900 Direct materials100 × $ ,195 Direct labor 70 × $ ,043 FOH 70 × $ ,246 Total $62,701 Completed and transferred out: 580 × $93.65$54,317 Work in process, ending (100 units): Cost from prev Dept.100 × $ ,900 Direct materials100 × $ ,195 Direct labor 70 × $ ,043 FOH 70 × $ ,246 Total $62,701

FIFO method

Notes Dalam asumsi aliran biaya FIFO, biaya unit pertama yang ditransfer keluar dari satu departemen dianggap berasal dari persediaan awal. Jika unit dari persediaan awal belum sepenuhnya selesai, unit tersebut harus diselesaikan terlebih dahulu dengan biaya periode berjalan sebelum dapat ditransfer keluar dari departemen tersebut. Total unit ekuivalen dari periode berjalan merupakan jumlah dari jumlah unit ekuivalen untuk biaya ditambahkan di periode berjalan guna menyelesaikan unit di persediaan awal ditambah unit yang dimulai dan diselesaikan selama periode berjalan serta unit ekuivalen di persediaan akhir. Untuk unit ekuivalen dari biaya periode berjalan yang diperlukan guna menyelesaikan unit di persediaan awal, tingkat penyelesaian di persediaan awal harus diketahui.

Step 1: Summarize the flow of physical units of output. CUTTINGASSEMBLING Work in process, beginning Started during current period in Cutting Dept. 600 Completed and transferred out during current period to Assembling Dept. 500 Started during current period in Assembling Dept. 500 Completed and transferred out during current period to Finish Goods. 580 Work in process, ending

Step 2: Compute output in terms of equivalent units (Cont’d) CUTIING DEPT.DMDLFOH Work in process, beginning80%40%60% Work in process, ending60%20%40% ASSEMBLING DEPT.DMDLFOH Work in process, beginning40%20% Work in process, ending100%70%

Step 2: Compute output in terms of equivalent units (Cont’d) Equivalent Units:DMDLFOH Work in process, begining Started & Completed during current period’s 400 Work in process, ending Total Equivalent Units CUTTING DEPT.

Alternative for Step 2: Compute output in terms of equivalent units (Cont’d) Equivalent Units:DMDLFOH Completed & Transfered Out 500 Work in process, ending Ekuivalent Units (total) (-) Work in process, begining Total Equivalent Units CUTTING DEPT.

Step 3: Compute equivalent unit costs Cost ($)CUTTINGASSEMBLING WIP, Begining: Cost From Previous Dept: 8,320 Direct Materials 1, Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials 13,6087,296 Direct Labor 5,0009,210 Factory Overhead 7,90411,052

Step 3: Compute equivalent unit costs (Cont’d) CUTTING DEPT. Equivalent Units:DMDLFOH Cost Aded During Current Periods 13,6085,0007,904 Devided: Equivalent Units Cost per Equivalent Units ($)

Step 4 & 5: Summarize and Assign Total Costs CUTTING DEPT. Step 4: Total costs to account for: $29,600 Step 5: Assign total costs: Work In Process, Beginning (100 units): From previous period’s $3,088 Aded during current period’s Direct materials20 × $ Direct labor60 × $ FOH40 × $ Started & Completed durring current period’s: 400 × $50.40$20,160 Work in process, ending (200 units): Direct materials120 × $ ,024 Direct labor 40 × $ FOH 80 × $ ,216 Total $29,600 Work In Process, Beginning (100 units): From previous period’s $3,088 Aded during current period’s Direct materials20 × $ Direct labor60 × $ FOH40 × $ Started & Completed durring current period’s: 400 × $50.40$20,160 Work in process, ending (200 units): Direct materials120 × $ ,024 Direct labor 40 × $ FOH 80 × $ ,216 Total $29,600

Step 1: Summarize the flow of physical units of output. CUTTINGASSEMBLING Work in process, beginning Started during current period in Cutting Dept. 600 Completed and transferred out during current period to Assembling Dept. 500 Started during current period in Assembling Dept. 500 Completed and transferred out during current period to Finish Goods. 580 Work in process, ending

Step 2: Compute output in terms of equivalent units (Cont’d) CUTIING DEPT.DMDLFOH Work in process, beginning80%40%60% Work in process, ending60%20%40% ASSEMBLING DEPT.DMDLFOH Work in process, beginning40%20% Work in process, ending100%70%

Step 2: Compute output in terms of equivalent units (Cont’d) Equivalent Units:Cost from Prev. Dept. DMDLFOH Work in process, begining Started & Completed during current period’s 400 Work in process, ending Total Equivalent Units ASSEMBLING DEPT.

Step 3: Compute equivalent unit costs Cost ($)CUTTINGASSEMBLING WIP, Begining: Cost From Previous Dept: 8,320 Direct Materials 1, Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials 13,6087,296 Direct Labor 5,0009,210 Factory Overhead 7,90411,052

Step 3: Compute equivalent unit costs (Cont’d) ASSEMBLING DEPT. Equivalent Units:Cost from Prev. Dept. DMDLFOH Cost Aded During Current Periods 24,9607,2969,21011,052 Devided: Equivalent Units Cost per Equivalent Units ($)

Step 4 & 5: Summarize and Assign Total Costs ASSEMBLING DEPT. Step 4: Total costs to account for: $62,661 Step 5: Assign total costs: Work In Process, Beginning (180 units): From previous period’s $10,143 Aded during current period’s Direct materials108 × $ ,296 Direct labor144 × $ ,160 FOH144 × $ ,592 Started & Completed durring current period’s: 400 × $94.92$37,968 Work in process, ending (200 units): Cost from prev. dept. 100 x $49.92 $4,992 Direct materials120 × $ ,200 Direct labor 40 × $ ,050 FOH 80 × $ ,260 Total $62,661 Work In Process, Beginning (180 units): From previous period’s $10,143 Aded during current period’s Direct materials108 × $ ,296 Direct labor144 × $ ,160 FOH144 × $ ,592 Started & Completed durring current period’s: 400 × $94.92$37,968 Work in process, ending (200 units): Cost from prev. dept. 100 x $49.92 $4,992 Direct materials120 × $ ,200 Direct labor 40 × $ ,050 FOH 80 × $ ,260 Total $62,661