Chapter 20, Problem E20.27E

To determine

Computation of production cost report for process when the units have been transferred in from previous process describes the step by step process of computation of production cost report where the units have been transferred-in from previous process.

When the units completed in previous process is transferred to next process, then the cost of such completed units is taken as Transferred-in Cost of next process and the equivalent units for such Transferred in cost shall also be computed along with material and Conversion cost in next process. For computing the equivalent units of Transferred-in cost, equivalents units for units in process at the end shall be taken on the basis of 100% degree of completion as regards to Transferred-in cost (as the processing in previous process is completed in full which is represented by Transferred-in cost)

The total cost of Transferred-in cost shall be the sum total of transferred in cost included in beginning work in process and added during the current period. The transferred-in cost per equivalent units shall be computed by dividing the total transferred-in cost by equivalent units of respective cost.

The Cost of Completed units and units in process at the end shall be computed on the basis of equivalent units of cost and their respective cost per equivalent units.

TheProduction cost report for the later process in which the units completed from previous process has been transferred-in need to be computed.