Chapter 28 - Process cost accounting. After reading this chapter, you should be able to: Compute equivalent units of production with no beginning work in process inventory, prepare a cost of production report with no beginning work in process inventory, compute the unit cost of manufacturing under the process cost accounting system,. | 1- McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Process Cost Accounting Section 1: Process Cost Accounting System Chapter 28 Section Objectives Compute equivalent units of production with no beginning work in process inventory. Prepare a cost of production report with no beginning work in process inventory. Compute the unit cost of manufacturing under the process cost accounting system. Record costs incurred and the flow of costs as products move through the manufacturing process and are sold. This system is used in operations when a single product is manufactured and production is continuous. Companies like oil refineries, cement producers, and paint manufacturers use this system. Costs are accumulated for each process or department and then transferred on to the next process or department. Process Cost Accounting System All products begin in the Assembly Department. Assembly Department Finished Goods Inventory Finishing Department . | 1- McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. Process Cost Accounting Section 1: Process Cost Accounting System Chapter 28 Section Objectives Compute equivalent units of production with no beginning work in process inventory. Prepare a cost of production report with no beginning work in process inventory. Compute the unit cost of manufacturing under the process cost accounting system. Record costs incurred and the flow of costs as products move through the manufacturing process and are sold. This system is used in operations when a single product is manufactured and production is continuous. Companies like oil refineries, cement producers, and paint manufacturers use this system. Costs are accumulated for each process or department and then transferred on to the next process or department. Process Cost Accounting System All products begin in the Assembly Department. Assembly Department Finished Goods Inventory Finishing Department Rome Manufacturing Company (manufacturer of trays) Trays to be sold in an unpainted state are transferred to the finished goods storeroom. Trays to be painted are transferred to the Finishing Department. Flow of Goods in a Factory Operation Departmental Cost Data All costs are recorded by department Equivalent production is the estimated number of units that could have been started and completed with the same effort and costs incurred in the department during the month. ANSWER: QUESTION: What is equivalent production in a process cost system? Separate equivalent unit computations are made for materials and for labor and overhead. In computing equivalent production, accountants frequently consider labor and overhead to be at the same stage of production. Calculating Equivalent Units Summarizes all costs charged to each department. Shows costs assigned to: Goods transferred out of the department Goods still in process Has separate sections for: Quantities Costs Reconciles the total to .
