Name: Vahia Ralliza H.

Dotarot
Subject and Section: Strategic Cost Management - BSA 2B- B48
Title: Process Costing
PROCESS COSTING
- Accumulating cost of production
by departments

NORMAL LOSS ABNORMAL LOSS

- Used to describe normal DEPARTMENT 1 DEPARTMENT 2 - When a loss occurs over and
expected spoiled units under above the normal expected
usual operating conditions. loss.

FIFO METHOD AVERAGE COSTING EXCESS OF WHAT

IN PROCESS FINISHED HAVE BEEN
GOODS 1. Units that were in beginning PREDICTED
inventory are completed. - No need to compute the equivalent units
2. Units that were both started for the transferred out. Transferred out
DISCOVERED are considered 100 % complete
and finished in the current PERIOD COST
BEGINNING.
CONVERSION period
COST 0 %
UNITS TRANSFERRED TO THE
NEXT DEPARTMENT +
COST OF BWIP COST ADDED EQUIVALENT UNITS IN EWIP
DISCOVERED DURING THE
END. INVENTORY = EUP
MONTH
CONVERSION
COST 100 %
BWIP
UNIT COST = BEGINNING & CURRENT COST
EQUIVALENT ARE COMBINED AND DIVIDED
STARTED & WORKED AMONG ALL UNITS
FINISHED PERFORMED

ASSIGN COST TO
EWIP UNITS