ch11 process costing.ppt

ch11 Process costing 分步成本法 Topic list ? The basics of Process Costing ? Framework for dealing with process costing ? Losses with scrap value ? Losses with a disposal cost ? Valuing closing work in progress ? Valuing opening work in progress: FIFO method ? Valuing opening work in progress: weighted average cost method Topic1 The basics of Process Costing Process costing is a costing method used where it is not possible to identify separate units of production, or jobs, usually because of the continuous nature of the production processes involved. 1.1 features of process costing (1)The output of one process becomes the input to the next until the finished product is made in the final process. (2)The continuous nature of production in many processes means that there will usually be closing work in progress which must be valued. In process costing it is not possible to build up cost records of the cost per unit of output or the cost per unit of closing stock because production in progress is an indistinguishable homogeneous mass. (3)There is often a loss in process due to spoilage, wastage, evaporation and so on. (4)Output from production may be a single product, but there may also be by-products（副产品） and / or joint products（联产品）. 1.2 Process accounts Process1 account Process2 account Topic2 Framework  for dealing with process costing Step 1. Determine output and losses Example: p218 Suppose that input to a process was 1000 units at a cost of 4500. Normal loss is 10% and there are no opening and closing stocks. Actual output were as follows: （a） 860 units （b） 920 units Step 1. Determine output and losses Step 1. Determine output and losses (1) The cost per unit = costs input ÷ expected output (2) expected output = input – normal loss The cost per unit of output and the cost per unit of abnormal loss are based on expected output. cost per unit of output, losses = ￡4,500/900 units = ￡5 per unit The cost per unit of outpu