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C. B.
manufacturing labor divided by the number
costs, and indirect of units of output from the
manufacturing costs production process.
(manufacturing overhead).
Horngren’s Cost Accounting 17/e, Datar/Rajan
CONSIDER THE FOLLOWING EXAMPLE :
Direct materials
added at beginning
of process
Because :
all direct materials are added to the process at one
time and all conversion costs generally are added to
the process evenly through time. Sometimes the
situation is different.
IMPORTANT …
Physical units refer to the number of output units, whether complete or incomplete.
In January 2020, all 400 physical units started were completed.
Total costs to account for in Step 3 ($50,600) equal total costs accounted for in
Step 5.
We describe the five-step approach for two key methods—the weighted-average method and the
first-in, first-out method. The different valuation methods generally produce different costs for
units completed and for ending work-in-process inventory