管理会计英文讲义 管理会计Session Process costing.docVIP

管理会计英文讲义 管理会计Session 8 Process costing Session 8 Process costing t method 　　 　　8.1 Process costing: 　　Process costing is a costing method used when it is not possible to identify separate units of production, or job, usually because of the continuous nature of the production processes involved. 　　Conversion cost = direct labour + production overheads 　　Features of process costing 　　● The output of one process becomes the input to the next until the finished product is made in the final process 　　● The closing work in process must be valued. 　　● There is often a loss in process due to spoilage, wastage, evaporation and so on 　　● Output from production may be a single product, by-product or joint product 　　Process 1 account 　 Unit $ 　 Unit $ Direct materials 1000 50000 Output to process 2 1000 90000 Direct labour 　 20000 　 　 　 Production overhead 　 20000 　 　 　 　 1000 90000 　 1000 90000 　　Process 2 account 　 Unit $ 　 Unit $ Materials from process 1 1000 90000 Output to finished goods 1000 150000 Added materials 　 30000 　 　 　 Direct labour 　 15000 　 　 　 Production overhead 　 15000 　 　 　 　 1000 150000 　 1000 150000 　　 　　8.2 Losses in process costing 　　Normal loss is the amount of loss expected from the operation of a process. This expectation is based on past experience, and this loss is considered to be unavoidable. 　　Abnormal loss is then extra loss resulting when actual loss is greater than normal or expected loss, and it is given a cost. 　　Abnormal gain is the gain resulting when actual loss is less than the normal or expected loss, and its is given a “negative cost”. 　　Example 1 　　Input to a process is 1000 units at a cost of $4500 　　Normal loss is 10% 　　There is no opening or closing stocks 　　（1）output = 860 units 　　（2）output = 920 units 　　Solution: 　　（1）output = 860 units 　　Step 1: determine output and losses 　　　　　　　　　　　　　　　　　　　units 　　Actual Loss 1000 units-860 units　 140 　　Normal Loss 1000 unit