ACCT 202 Chapter Notes - Chapter 16: Finished Good, Operations Management, Financial Statement

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Costs cannot be directly traced to each unit of product. Same objective: to determine the cost of products. Same inventory accounts: paw materials, work in progress, and finished goods. Same oh assigned method: predetermined rate times actual activity. Difference: how the cost of goods transferred to finished goods is determined. The cost of goods transferred to finished goods is = to the sum of all of the completed jobs for that period. The cog transferred to finished goods = the # of completed units * the cost per equivalent unit. Equivalent units is a concept expressing a number of partially completed units as a smaller number f fully completed units. Two half full pitchers are = one full pitcher. Avg cost per equivalent unit = product costs for the period / equiv. units for the period. Shows the flow of units and costs through work in process.

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