ACCT 311 Lecture Notes - Lecture 4: Finished Good
25 Jun 2018
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Chapter 4: Process Costing
Student Learning Outcomes:
β’Describe the traditional types of product costing systems (including job-order and process), illustrate
the flow of costs in each, and prepare related accounting records and reports.
Chapter Outline:
1. Comparison of Job-order and Process Costing
β’ Process Costing - costing system used when a company produces many units of a
single, homogeneous product which flows evenly through the production
process continuously for long periods of time
β’ Each unit is assigned the same average cost by accumulating all costs for the entire
period and dividing by total number of units produced that period!
βSimilarities
β’Both calculate the per unit
costs of products
β’Both use the same manufacturing
account
β’Both have similar flows of
costs through these accounts
βDifferences
β’Job-order costing is used for
different jobs , process
costing is used for a
homogenous product
produced continuously
β’Job-order costing accumulates costs
by job , process costing
accumulates costs for a period by
department
β’Job-order costing computes unit
cost by job , process costing
computes unit cost by department
β’Job-order costing uses a job
cost sheet, process costing
uses a department production
report
1. Comparison of Job-order and Process Costing
2. Process Cost Flows
3. Accounting for Units
4. Equivalent Units of Production β Weighted-average Method
5. Cost per Equivalent Unit
6. Accounting for Costs
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Student learning outcomes: describe the traditional types of product costing systems (including job-order and process), illustrate the flow of costs in each, and prepare related accounting records and reports. Chapter outline: comparison of job-order and process costing, process cost flows, accounting for units, equivalent units of production weighted-average method, cost per equivalent unit, accounting for costs. Process costing single, homogeneous process continuously for long periods of time. Differences: both calculate the per unit costs of products, both use the same manufacturing account, both have similar flows costs through these accounts of jobs. Process cost flows: processing department - a location where work is performed on a product and materials, labor, or overhead costs are added to the product. Department output must be uniformly homogeneous: flow of materials, labor, and overhead costs on all units. A wip account is needed for each processing department. Completed production from the first department is transferred to the wip of the.
