管理会计双语人教版--Chapter-04.pptVIP

The first learning objective is to prepare cost of production reports using weighted-average costing and prepare related journal entries. * * Companies like Shell Oil, Crayola, and Sony use a series of steps (called processes) to make large quantities of similar products, called process costing systems. There are two methods for handling process costing—weighted average and FIFO. As products are made, they move through the manufacturing process from one stage to another. Computing the products’ cost becomes more complicated when units are still in process. This slide summarizes the flow of costs for a company that uses process costing: Each process (dept 1 and dept 2) is a separate department and each department has its own Work in process inventory account. Direct materials, direct labor, and manufacturing overhead are assigned to Work in process inventory for each process that uses them( in this example, both dept 1 and dept 2 apply different DM, DL, and MOH) . When the dept 1 process is complete, the unfinished product moves out of dept 1 and into dept 2. The dept 1 cost is also transferred out of the account titled Work in process inventory—dept 1 and into the account titled into Work in process inventory—dept 2. When production is complete in dept 2, the finished products go into finished goods storage. The combined costs from all departments then flow into Finished goods inventory, but only from the Work in process inventory account of the last manufacturing process. (For this company, dept 2 is the last department.) When goods are sold, their costs move from Finished goods inventory to Cost of goods sold. * * Combining direct labor and manufacturing overhead in a single category simplifies the accounting. We call this category conversion costs because it is the cost (direct labor plus manufacturing overhead) to convert raw materials into finished products. Completing most products takes time, so a company may have Work in process inventories for products t