Concept explainers
(A) (1)
It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.
Equivalents units for production
The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process.
Production cost report
A production cost report is a comprehensive report prepared for each department separately at the end of a particular period, which represents the physical flow and cost flow of product for the concerned department.
The costs of beginning work in process inventory balance.
(B)
To Identify: Whether the production costs changes from the preceding year, and explain.
(C)
To Identify: If the direct material cost per unit did not change from the preceding period, whether the conversion equivalent cost per unit would be increase, or decrease or remain constant during the current period.
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Managerial Accounting
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