BU247 Lecture Notes - Lecture 10: Cost Driver
Document Summary
Introduction to job costing: a one off, unique type of job. Overhead = units of cost driver x cost driver rate. Death spiral = if you keep doing this, the demand keeps getting higher and higher (referenced to in text) Process costing: setting, equivalent units of production, cost per equivalent unit. Identify the physical flow: compute equivalent units of production, accumulate costs of production costs, compute the production cost per equivalent unit of production, assign production costs to ending work in process and goods completed and transferred out. By definition if there are units in ending work in process they are not complete. The issue is to decide how to allocate production costs between partially complete and completed units of production. Equivalent units are used to give credit for partially completed production. Converts partially completed production to the equivalent units of completed production. Types of costs in process costing: materials.
