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  • Lecture Chapter 6

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    Hakim Ashari
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    This document discusses different inventory costing methods and how to calculate equivalent units. It notes that FIFO and weighted average methods can result in the same total cost but different ending inventory balances. It also provides steps for a production report, including performing a physical flow analysis, calculating equivalent units and unit costs, valuing inventories, and reconciling costs.

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    This document discusses different inventory costing methods and how to calculate equivalent units. It notes that FIFO and weighted average methods can result in the same total cost but different ending inventory balances. It also provides steps for a production report, including performing a physical flow analysis, calculating equivalent units and unit costs, valuing inventories, and reconciling costs.

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    8 views1 page

    Lecture Chapter 6

    Uploaded by

    Hakim Ashari
    This document discusses different inventory costing methods and how to calculate equivalent units. It notes that FIFO and weighted average methods can result in the same total cost but different ending inventory balances. It also provides steps for a production report, including performing a physical flow analysis, calculating equivalent units and unit costs, valuing inventories, and reconciling costs.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Different methods FIFO, WA

     Same number of units


     Same total cost
     Different ending WIP

    Equivalent unit means every COMPLETED units

    At the end, make sure

     Total WIP is equivalent to (Ending Inventory + COGS)

    Slide 17, 18

     60,000 liters = 10,000 (ending WIP) + 50,000 (transferred out)


     60,000 – 20,000 (Beg WIP) = 40,000 (started with, or completed

    FIFO method is different because you must keep Beg WIP separated

    Production report (5 steps)

    1) Physical flow analysis


    2) Calculate equivalent units
    3) Calculate unit cost
    4) Valuate inventories (ie. Transfer-out and EWIP)
    5) Cost reconciliation

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