Chapter 4: Process-Costing Systems

Weighted-average method of process costing

Steps 1 and 2: Summarize output in physical units and calculate equivalent
units.
(Step 2)
(Step 1) Equivalent units
Physical Direct Conversion
Flow of production units materials costs
Work in progress, opening
+ Started during current period
= To account for

Completed and transferred out during Fachbereich Elektrische

Energietechnik
current period
+ Work in progress, closing Prof. Dr. Valerie Wulfhorst
= Accounted for (physical units)
Betriebswirtschaftslehre,
= Work done to date (equivalent units)
insb. Controlling

Telefon
Steps 3, 4 and 5: Compute equivalent unit costs, summarize total costs to 02921 378-451
account for, and assign these costs to units completed and units in closing Telefax
02921 378-409
work in progress using the weighted-average method.
E-Mail
v.wulfhorst@fh-swf.de
Total
production Direct Conversion
costs materials costs Standort Soest
Lübecker Ring 2
Step 3: Compute equivalent-unit costs
59494 Soest
Work in progress, opening
+ Costs added in current period
= Costs incurred to date
: Equivalent units of work done to date
= Equivalent-unit costs of work done to
date
Fachhochschule
Südwestfalen
Step 4: Summarize total costs Sitz: Iserlohn
Total costs to account for
Hagen
Step 5: Assignment of costs Iserlohn
Meschede
Completed and transferred out
Soest
+ Work in progress, closing
= Total costs accounted for www.fh-swf.de

Page 1
Chapter 4: Process-Costing Systems
FIFO method of process costing
Steps 1 and 2: Summarize output in physical units and calculate equivalent
units.
(Step 2)
(Step 1) Equivalent units
Physical Direct Conversion
Flow of production units materials costs
Work in progress, opening
+ Started during current period
= To account for

Completed and transferred out during

current period
a) From opening WIP
b) Started and completed
+ Work in progress, closing
= Accounted for (physical units)
= Work done in current period (equivalent
units)

Steps 3, 4 and 5: Compute equivalent unit costs, summarize total costs to

account for, and assign these costs to units completed and units in closing
work in progress using the FIFO method.
Total
production Direct Conversion
costs materials costs
Step 3: Compute equivalent-unit costs
Work in progress, opening
Costs added in current period
: Equivalent units of work done in current
period
= Equivalent-unit costs of work done in
current period
Step 4: Summarize total costs
Total costs to account for
Step 5: Assignment of costs
Completed and transferred out
a) From opening WIP
b) Work done in current period to
complete opening WIP
c) Started and completed
Total costs of units completed and
transferred out
+ Work in progress, closing
= Total costs accounted for

Page 2