Process Costing

Kristin Rosalina

Job Order

Costing System

Depend on variety of services or products

Process

Process or joborder costing?

Characteristics of Job-Order Costing

Wide-variety of services

or products that are quite distinct from each other

Cost accumulated by job Unit cost computed by

BEAT SOUTH HIGH

dividing total job costs by units produced on that job

Characteristics of Process Costing

Produce large quantities of

similar or homogeneous products

Cost accumulated by process or

department for a given period of time

Unit cost computed by dividing

process costs of period by the units produced in the period

Process or job-order costing?

Exxon oil refinery Coca Cola plant Custom home builder Shop for customizing vans Television repair shop Campbell soup plant

Advertising agency
Law firm

Weighted Average

PROCESS COSTING

Cost flow

FIFO

Sequential Processing

Cutting

Assembling

Finished Goods

Five Steps in Process Costing

Step 1: Summarize the flow of physical units of output. Step 2: Compute output in terms of equivalent units. Step 3: Compute equivalent unit costs. Step 4: Summarize total costs to account for. Step 5: Assign total costs to units completed and to units in ending work in process inventory.

Weighted average method

CUTTING Work in process, beginning Started during current period in Cutting Dept. Completed and transferred out during current period to Assembling Dept. Started during current period in Assembling Dept. Completed and transferred out during current period to Finish Goods. Work in process, ending

ASSEMBLING

100 600 500

180

500 580 100

200

Step 1: Summarize the flow of physical units of output.

Concept:

=
100 units completed

= 100 equivalent units

=
200 units, 50% completed = 100 equivalent units

Step 2: Compute output in terms of equivalent units

.

CUTIING DEPT. Work in process, beginning Work in process, ending ASSEMBLING DEPT. Work in process, beginning Work in process, ending

DM 80% 60% DM 40% 100%

DL 40% 20% DL 20% 70%

FOH 60% 40% FOH 20% 70%

Step 2: Compute output in terms of equivalent units (Contd)

CUTTING DEPT.

Equivalent Units: Completed and transferred out Work in process, ending Total Equivalent Units

DM

DL

FOH

500 120 620

500 40 540

500 80 580

Step 2: Compute output in terms of equivalent units (Contd)

Cost ($) WIP, Begining: Cost From Previous Dept: Direct Materials Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials Direct Labor Factory Overhead

CUTTING

ASSEMBLING

1,892 400 796 13,608 5,000 7,904

8,320 830 475 518 7,296 9,210 11,052

Step 3: Compute equivalent unit costs

CUTTING DEPT.
Equivalent Units: DM DL FOH

Cost From Beginning WIP Invent. Cost Aded During Current Periods Total Cost To Accounted For Devided: Equivalent Units
Cost per Equivalent Units ($)

1,892 13,608 15,500

620 25

400 5,000 5,400

540 10

796 7,904 8,700

580 15

Step 3: Compute equivalent unit costs (Contd)

CUTTING DEPT. Step 4: Total costs to account for: $29,600

Step 5: Assign total costs:

Completed and transferred out: 500 $50 Work in process, ending (200 units): Direct materials 120 $25 Direct labor 40 $10 FOH 80 $15 Total $25,000 3,000 400 1,200 $29,600

Step 4 & 5: Summarize and Assign Total Costs

Indiana Corp. Departemen Pemotongan Laporan Biaya Produksi Untuk Bulan Januari 2011 (Dalam Puluhan Ribu Rupiah) Bahan Baku Skedule Kuantitas Persediaan Awal Dimulai di periode ini Tenaga Kerja Overhead Total 100 600 700 500 200 700 Biaya Per Unit

Ditransfer ke Departemen Perakitan Persediaan Akhir BDP Dep. Pemotonngan

60%

20%

40%

Biaya Dibebankan ke Departemen Persediaan Awal: Bahan baku Tenaga Kerja Overhead Pabrik Total Biaya di Persediaan Awal Biaya Ditambahkan Selama Periode Berjalan Bahan baku Tenaga Kerja Overhead Pabrik Total biaya ditambahkan selama periode berjalan Total Biaya Dibebankan ke Departemen Biaya Dipertanggungjawabkan Sebagai Berikut: Ditransfer ke Departemen Perakitan Barang Dalam Proses persediaan akhir Bahan baku Tenaga Kerja Overhead Pabrik Total Biaya Dipertanggungjawabkan % Penyelesaian 100% 60% 20% 40%

Total Biaya 1,892 400 796 3,088

Unit Ekuivalen

13,608 5,000 7,904 26,512 29,600 Unit Ekuivalen 500 120 40 80

620 540 580

25 10 15 50

Unit 500 200 200 200

Biaya Per Unit 50 25 10 15

Total Biaya 25,000 0 3,000 400 1,200 29,600

CUTTING Work in process, beginning Started during current period in Cutting Dept. Completed and transferred out during current period to Assembling Dept. Started during current period in Assembling Dept. Completed and transferred out during current period to Finish Goods. Work in process, ending

ASSEMBLING

100 600 500

180

500 580 100

200

Step 1: Summarize the flow of physical units of output.

Concept:

=
100 units completed

= 100 equivalent units

=
200 units, 50% completed = 100 equivalent units

Step 2: Compute output in terms of equivalent units

.

CUTIING DEPT. Work in process, beginning Work in process, ending ASSEMBLING DEPT. Work in process, beginning Work in process, ending

DM 80% 60% DM 40% 100%

DL 40% 20% DL 20% 70%

FOH 60% 40% FOH 20% 70%

Step 2: Compute output in terms of equivalent units (Contd)

ASSEMBLING DEPT.
Equivalent Units: Cost from Prev. Dept. DM DL FOH

Completed and transferred out

580
100 680

580
100 680

580
70 650

580
70 580

Work in process, ending

Total Equivalent Units

Step 2: Compute output in terms of equivalent units (Contd)

Cost ($) WIP, Begining: Cost From Previous Dept: Direct Materials Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials Direct Labor Factory Overhead

CUTTING

ASSEMBLING

1,892 400 796 13,608 5,000 7,904

8,320 830 475 518 7,296 9,210 11,052

Step 3: Compute equivalent unit costs

ASSEMBLING DEPT.
Equivalent Units: Cost from Prev. Dept. DM DL FOH

Cost From Beginning WIP Invent. Cost Aded During Current Periods Total Cost To Accounted For Devided: Equivalent Units Cost per Equivalent Units ($)

8,320

830

475

518

25,000
33,320 680 49.00

7,296
8,126 680 11.95

9,210
9,685 650 14.90

11,052
11,570 580 17.80

Step 3: Compute equivalent unit costs (Contd)

CUTTING DEPT. Step 4: Total costs to account for: $62,701

Step 5: Assign total costs:

Completed and transferred out: 580 $50 $54,317 Work in process, ending (100 units): Cost from prev Dept. 100 $49.00 4,900 Direct materials 100 $11.95 1,195 Direct labor 70 $14.90 1,043 FOH 70 $17.80 1,246 Total $62,701 Step 4 & 5: Summarize and Assign Total Costs

FIFO method

 Dalam asumsi aliran biaya FIFO, biaya unit pertama yang ditransfer keluar dari satu departemen dianggap berasal dari persediaan awal. Jika unit dari persediaan awal belum sepenuhnya selesai, unit tersebut harus diselesaikan terlebih dahulu dengan biaya periode berjalan sebelum dapat ditransfer keluar dari departemen tersebut. Total unit ekuivalen dari periode berjalan merupakan jumlah dari jumlah unit ekuivalen untuk biaya ditambahkan di periode berjalan guna menyelesaikan unit di persediaan awal ditambah unit yang dimulai dan diselesaikan selama periode berjalan serta unit ekuivalen di persediaan akhir. Untuk unit ekuivalen dari biaya periode berjalan yang diperlukan guna menyelesaikan unit di persediaan awal, tingkat penyelesaian di persediaan awal harus diketahui.

Notes

CUTTING Work in process, beginning Started during current period in Cutting Dept. Completed and transferred out during current period to Assembling Dept. Started during current period in Assembling Dept. Completed and transferred out during current period to Finish Goods. Work in process, ending

ASSEMBLING

100 600 500

180

500 580 100

200

Step 1: Summarize the flow of physical units of output.

CUTIING DEPT. Work in process, beginning Work in process, ending ASSEMBLING DEPT. Work in process, beginning Work in process, ending

DM 80% 60% DM 40% 100%

DL 40% 20% DL 20% 70%

FOH 60% 40% FOH 20% 70%

Step 2: Compute output in terms of equivalent units (Contd)

CUTTING DEPT.

Equivalent Units: Work in process, begining Started & Completed during current periods Work in process, ending Total Equivalent Units

DM

DL

FOH

20 400 120 540

60 400 40 500

40 400 80 520

Step 2: Compute output in terms of equivalent units (Contd)

CUTTING DEPT.

Equivalent Units: Completed & Transfered Out Work in process, ending Ekuivalent Units (total) (-) Work in process, begining Total Equivalent Units

DM

DL

FOH

500 120 620

500 40 540

500 80 580

80 540

40 500

60 520

Alternative for Step 2: Compute output in terms of equivalent units (Contd)

Cost ($) WIP, Begining: Cost From Previous Dept: Direct Materials Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials Direct Labor Factory Overhead

CUTTING

ASSEMBLING

1,892 400 796 13,608 5,000 7,904

8,320 830 475 518 7,296 9,210 11,052

Step 3: Compute equivalent unit costs

CUTTING DEPT.
Equivalent Units: Cost Aded During Current Periods Devided: Equivalent Units Cost per Equivalent Units ($) DM DL FOH

13,608 540 25.20

5,000 500 10.00

7,904 520 15.20

Step 3: Compute equivalent unit costs (Contd)

CUTTING DEPT.
Step 4: Total costs to account for: $29,600 Step 5: Assign total costs:
Work In Process, Beginning (100 units): From previous periods Aded during current periods Direct materials 20 $25.20 Direct labor 60 $10.00 FOH 40 $15.20 Started & Completed durring current periods: 400 $50.40 Work in process, ending (200 units): Direct materials 120 $25.20 Direct labor 40 $10.00 FOH 80 $15.20 Total $3,088 504 600 608 $20,160 3,024 400 1,216 $29,600

Step 4 & 5: Summarize and Assign Total Costs

Indiana Corp. Departemen Pemotongan Laporan Biaya Produksi Untuk Bulan Januari 2011 Bahan Baku Skedule Kuantitas Pe rse diaan Aw al Dimulai di pe riode ini 80% Tenaga Kerja 40% Overhe ad 60% Total 100 600 700 500 200 700 Biaya Per Unit

Ditransfe r ke De parte me n Pe rakitan Pe rse diaan Akhir BDP De p. Pe motonngan

60%

20%

40%

Biaya Dibebankan ke Departemen Pe rse diaan Aw al: Bahan baku Te naga Ke rja Ove rhe ad Pabrik Total Biaya di Pe rse diaan Aw al Biaya Ditambahkan Se lama Pe riode Be rjalan Bahan baku Te naga Ke rja Ove rhe ad Pabrik Total biaya ditambahkan se lama pe riode be rjalan Total Biaya Dibe bankan ke De parte me n Biaya Dipertanggungjawabkan Sebagai Berikut: Ditransfer ke Departemen Perakitan: Biaya BDP Aw al dari pe riode se be lumnya Biaya pe nye le saian BDP aw al di pe riode be rjalan: Bahan baku Te naga Ke rja Ove rhe ad Pabrik Total Biaya dari BDP Awal Dimulai dan Diselesaikan di periode berjalan Ditransfer ke Departemen Perakitan Barang Dalam Proses persediaan akhir: Bahan baku Te naga Ke rja Ove rhe ad Pabrik Total Biaya Dipe rtanggungjaw abkan Unit % Penyele saian

Total Biaya 1,892 400 796 3,088

Unit Ekuival en

13,608 5,000 7,904 26,512 29,600 Unit Ekuival en

540 500 520

25.20 10.00 15.20 50.40

Biaya Per Unit

Total Biaya 3,088

100 100 100 400

20% 60% 40% 100%

20 60 40 400

25.20 10.00 15.20 50.40

504 600 608 4,800 20,160 24,960 3,024 400 1,216 29,600

200 200 200

60% 20% 40%

120 40 80

25 10 15

CUTTING Work in process, beginning Started during current period in Cutting Dept. Completed and transferred out during current period to Assembling Dept. Started during current period in Assembling Dept. Completed and transferred out during current period to Finish Goods. Work in process, ending

ASSEMBLING

100 600 500

180

500 580 100

200

Step 1: Summarize the flow of physical units of output.

CUTIING DEPT. Work in process, beginning Work in process, ending ASSEMBLING DEPT. Work in process, beginning Work in process, ending

DM 80% 60% DM 40% 100%

DL 40% 20% DL 20% 70%

FOH 60% 40% FOH 20% 70%

Step 2: Compute output in terms of equivalent units (Contd)

ASSEMBLING DEPT.
Equivalent Units: Cost from Prev. Dept. DM DL FOH

Work in process, begining Started & Completed during current periods Work in process, ending Total Equivalent Units

0 400 100 500

108 400 100 608

144 400 70 614

144 400 70 614

Step 2: Compute output in terms of equivalent units (Contd)

Cost ($) WIP, Begining: Cost From Previous Dept: Direct Materials Direct Labor Factory Overhead Cost Aded During Current Periods: Direct Materials Direct Labor Factory Overhead

CUTTING

ASSEMBLING

1,892 400 796 13,608 5,000 7,904

8,320 830 475 518 7,296 9,210 11,052

Step 3: Compute equivalent unit costs

ASSEMBLING DEPT.
Equivalent Units: Cost from Prev. Dept. DM DL FOH

Cost Aded During Current Periods

24,960
500 49.92

7,296
608 12.00

9,210
614 15.00

11,052
614 18.00

Devided: Equivalent Units

Cost per Equivalent Units ($)

Step 3: Compute equivalent unit costs (Contd)

ASSEMBLING DEPT.
Step 4: Total costs to account for: $62,661 Step 5: Assign total costs:
Work In Process, Beginning (180 units): From previous periods Aded during current periods Direct materials 108 $12.00 Direct labor 144 $15.00 FOH 144 $18.00 Started & Completed durring current periods: 400 $94.92 Work in process, ending (200 units): Cost from prev. dept. 100 x $49.92 Direct materials 120 $12.00 Direct labor 40 $15.00 FOH 80 $18.00 Total $10,143 1,296 2,160 2,592 $37,968

$4,992 1,200 1,050 1,260 $62,661

Step 4 & 5: Summarize and Assign Total Costs

Indiana Corp. Departemen Perakitan Laporan Biaya Produksi Untuk Bulan Januari 2011 Bahan Baku Skedule Kuantitas Pe rse dia a n Aw a l Dimula i di pe riode ini 40% Tenaga Kerja 20% O verhe ad 20% Total 180 500 680 580 100 680 Biaya Per Unit

Ditra nsfe r ke De pa rte me n Pe ra kita n Pe rse dia a n Akhir BDP De p. Pe motonnga n

100%

70%

70%

Biaya Dibebankan ke Departemen Pe rse dia a n Aw a l: Bia ya da ri de pa rte me n se be lumnya Ba ha n ba ku Te na ga Ke rja Ove rhe a d Pa brik Tota l Bia ya di Pe rse dia a n Aw a l Bia ya Dita mba hka n Se la ma Pe riode Be rja la n Bia ya da ri de pa rte me n se be lumnya Ba ha n ba ku Te na ga Ke rja Ove rhe a d Pa brik Tota l bia ya dita mba hka n se la ma pe riode be rja la n Tota l Bia ya Dibe ba nka n ke De pa rte me n Biaya Dipertanggungjawabkan Sebagai Berikut: Ditransfer ke Departemen Perakitan: Bia ya BDP Aw a l da ri pe riode se be lumnya Bia ya pe nye le sa ia n BDP a w a l di pe riode be rja la n: Ba ha n ba ku Te na ga Ke rja Ove rhe a d Pa brik Total Biaya dari BDP Awal Dimulai dan Diselesaikan di periode berjalan Ditransfer ke Departemen Perakitan Barang Dalam Proses persediaan akhir: Bia ya da ri de pa rte me n se be lumnya Ba ha n ba ku Te na ga Ke rja Ove rhe a d Pa brik Tota l Bia ya Dipe rta nggungja w a bka n Unit % Penyele saian

Total Biaya 8,320 830 475 518 10,143

Unit Ekuival en

24,960 7,296 9,210 11,052 52,518 62,661 Unit Ekuival en

500 608 614 614

49.92 12.00 15.00 18.00 94.92

Biaya Per Unit

Total Biaya 10,143

180 180 180 400

60% 80% 80% 100%

108 144 144 400

12.00 15.00 18.00 94.92

1,296 2,160 2,592 16,191 37,968 54,159 4,992 1,200 1,050 1,260 62,661

100 100 100 100

100% 100% 70% 70%

100 100 70 70

49.92 12.00 15.00 18.00