How do you calculate the total number of units to account for?
Add the units in beginning WIP to the units started during the period.
Once you have the total units to account for, what components do you split them between if using FIFO?
Beginning WIP, Ending WIP, and Units started and completed (the rest)
Once you have the total units to account for, what components do you split them between if using Weighted Average?
Ending WIP and Units Completed (which includes Beginning WIP)
How do you calculate the equivalent units for beginning WIP when using the FIFO method?
Subtract out the percentage of work completed in the previous period.
How do you calculate the equivalent units for ending WIP when using either FIFO or weighted average
Consider only the percentage of work done in the current period.
How do you calculate equivalent units for completed units?
Materials and conversion are 100% considered.
After equivalent units are calculated for each component, what should be done next?
The equivalent units should be totaled up for materials and conversion.
When finding cost per equivalent unit, what is the first thing that needs to be done if using the weighted average method?
Costs for materials and conversion for beginning WIP should be added to the costs added during the period.
How do you calculate the cost per equivalent unit using the FIFO method?
The conversion and materials costs added during the period should be divided by the total equivalent units.
How do you calculate the cost per equivalent unit using the weighted average method?
Divide the total materials and conversion cost by the equivalent units.
After cost per equivalent unit is calculated, what components should costs be split into for the FIFO method?
Costs added to beginning WIP
Costs added to ending WIP
Cost for units started and completed
After cost per equivalent unit is calculated, what components should costs be split into for the weighted average method?
Costs added to ending WIP
Costs for units completed (which includes beginning WIP)
How do you divide the costs between the components?
Multiply the equivalent units for each component by the cost per equivalent unit for materials and conversion.
How do you do a reconciliation for the FIFO method?
Add costs added to beginning WIP, costs added to ending WIP, and costs for units started and completed. Compare with the total cost added during the period.
How do you do a reconciliation for the weighted average method?
Add total costs added to ending WIP to costs for units completed. Add the total cost added during the period to the beginning WIP cost. Compare the figures.
What are the 4 steps to process costing?
1. Calculate equivalent units
2. Calculate cost per equivalent unit
3. Break costs into components
4. Reconcile
