Essay about Performance Supervision
CHAPTER your five
PRODUCT AND SERVICE COSTING:
A PROCESS SYSTEMS PROCEDURE
AFTER STUDYING THIS PART, YOU SHOULD BE ABLE TO:
1 . Illustrate the basic qualities of method costing, which include cost moves, journal articles, and the expense of production survey. 2 . Illustrate process being for configurations without work-in-process inventories. three or more. Define comparative units, and explain their role in procedure costing. four. Prepare a departmental production statement using the FIFO method. a few. Prepare a department production record using the weighted average technique. 6. Make a departmental creation report with transferred-in products and changes in output steps. 7. Illustrate the basic highlights of operation priced at.
8. Clarify how spoilage is remedied in a procedure costing system.
THIS PHASE INTRODUCES THE PROCESS COSTING SYSTEM DESIGNED FOR BUSINESSES THAT GENERATE LARGE NUMBERS OF HOMOGENEOUS PRODUCTS PASSING THROUGH A SERIES OF OPERATIONS. IT ALSO EXPLAINS FOR WHAT REASON PROCESS BEING CAN BE USED IN THE SERVICE MARKET AND JIT MANUFACTURING ORGANIZATIONS. WHEN WORK-IN-PROCESS INVENTORIES EXIST, EQUIVALENT UNITS MUST BE USED TO MEASURE RESULTS. NOTE THAT TWO DIFFERENT STRATEGIES (FIFO OR WEIGHTED AVERAGE) CAN BE USED TO TAKE CARE OF THE PRIOR-PERIOD WORK AND PRIOR-PERIOD EXPENSES ASSOCIATED WITH THE BEGINNING WORK-IN-PROCESS INVENTORIES. ADDITIONALLY , THE OPERATION COSTING CAN BE PRESENTED AS A HYBRID PROGRAM FOR THOSE MANUFACTURING ENVIRONMENTS THAT HAVE BOTH JOB AND PROCESS CHARACTERISTICS.
We. PROCESS BEING SYSTEMS: BASIC OPERATIONAL AND COST PRINCIPLES Process costing systems are created to assign costs to a large numbers of homogeneous goods passing through a number of processes. Each process executes specific activities that bring a product nearer to completion. Hence, a process is a series of actions (operations) that are linked to execute a specific objective. A. Expense Flows
1 . The price flows within a process cost system happen to be tracked and accumulated simply by process. Each process, therefore, will have a separate WIP accounts to track making costs. 2 . When products are designed in one method, they are transported with their costs to the future process. several. Costs moved from a prior process into a subsequent method are called transferred-in costs. The costs of goods being transported into a procedure can be considered a kind of " organic material” cost that is added at the beginning of the procedure.
Review book Exhibit 5-2, which shows the different cost accumulation approaches between job-order costing and process priced at systems.
Assessment textbook Show 5-3, which in turn compares the job-order being and method costing by focusing on the charge flows through different work-in-process accounts.
B. The Production Report
1 . In method costing, the production report summarizes the manufacturing activity within a process for a given time frame. The record also serves as a origin document for transferring costs from the WIP account of any prior process to the WIP account of a subsequent method. 2 . A production report traces the flow of units throughout the process, determines the costs billed to the method, shows the computation of unit costs, and shows the predisposition of the costs of the process for the period. C. Unit Costs
1 . The calculations of device costs in a process system involves: � Computing the manufacturing costs for a procedure department to get a given period of time.
� Computing the output in units with the process section for that same time period.
� Calculating the system cost by simply dividing the expense of the period by the products produced during the period. That may be, each unit in every process gets a similar share of...