MGMT 1B Lecture Notes - Lecture 8: Fixed Cost, Harpercollins, Earnings Before Interest And Taxes
Document Summary
Goal: to calculate cost per equivalent unit in order to determine ending wip and cogm. Dm will be done at the very beginning but conversion costs (cc) will not be ex. ) Going to the store to buy materials- dm are done after that because you have already bought them. Cost per unit= total costs/ total equivalent units. There are two methods of determining a cost per unit: 1. ) weighted average 2. ) Weighted average- both beginning wip and current wip in units and cost are used; does include beg wip to extent it"s completed in a prior period. Modified fifo- only current wip in units and cost are used; does not include beg wip to extent it"s completed in a prior period ex. ) End wip is 80% complete (started in prior period + 25% completed but not finished) 200 (started in this period) 825 (started but not completed i. e. 80% done) total= 125.