MGT 5 Lecture Notes - Lecture 6: Activity-Based Costing
20 Oct 2018
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Equivalent units is the equivalent ending units for dm and cc. These are the units that are transferred into the next wip. Cc can"t be 100% because then it would be transferred out into the next department and wouldn"t be in wip. Take the percentage of cc and multiply it by the ending wip. That"s how much overhead and labor was transferred out. Step 4 gives you the cost imbedded in each step of the production process (aka. Step 2 and step 4 are related using the answer from step 3 to connect them. 56,250 is 75% of 75,000, therefore 180,000 is 75% of whatever the total cost is missing. ^ use this method of finding proportions to solve the problem if there are data pieces. Company has 2 products, product a is doing great and bringing in a lot of money and. Not due to advertising or marketing failures. They have the sharing of the oh wrong.
