Total units accounted for 1115

5 Steps in Process Costing DM-A DM-B DM-C CC

1,000 1,000 1,000 1,000
Step 1: Physical Units 10 - 10 10
Flow of Production: 5 - 5 5
Work in process, 100 - 100 70
beginning xxx 1,115 1,000 1,115 1,085
Started during current
period xxx B. FIFO
Total units to be
accounted for xxx

Step 2: Compute the output in terms of

equivalent units (EUP)

AVERAGE
Completed xxx
Normal Loss (Inventoriable) xxx
Abnormal Loss (P/L) xxx
WIP, ending xxx
Total units accounted for xxx

FIFO
Beginning/completed xxx
Started/ Completed xxx
Normal Loss (Inventoriable) xxx
Abnormal Loss (P/L) xxx
WIP, ending xxx
Total units accounted for xxx

Direct Materials
Check if:
1. Added at the start
 100% for all started
2. Added at the end
 100% if the good units reached the end
3. Added somewhere in between
 ex. At 50% point

Conversion Cost
 Check the percentage completed.

EXAMPLE:
A. AVERAGE
DM-A 100% for all
Completed started 1000
DM-B 100% if the good 10
Normal Loss (Inventoriable)
Abnormal Loss (P/L) units reached the 5
WIP, ending end 100
DM-C 50%-point
Beginning/completed 200
 Started/ Completed 800
Normal Loss (Inventoriable) 10
Abnormal Loss (P/L) 5
WIP, ending 100
Total units accounted for 1,11
5

DM-A DM-B DM-C CC

200 - 200 140
800 800 800 800
10 - 10 10
5 - 5 5
100 - 100 70
1,115 915 1,000 1,025
Step 3: Compute the Equivalent Unit Cost Allocated Cost of Normal Loss xx
Unit Cost to be Multiplied to Step 2 Total Transferred Out xx
 Per Element (DM, Transfer-In, CC)
WIP, Ending:
WEIGHTED AVERAGE
= (Beginning + Current Cost) / EUP EUP per cost element x EUC xx
Allocated Cost of Normal Loss
FIFO (If WIP, end done with inspection
= Current Cost / EUP point – considered as good units) xx
Total WIP, ending xx
Step 4 & 5: Summarize and Assign Total Abnormal Loss:
Costs
EUP per cost element x EUC xx
WEIGHTED AVERAGE
Transfer Out:
Cost of completed units
(EUP x EUC of all cost elements) xx
Allocated Cost of Normal Loss xx
Total Transferred Out xx

WIP, Ending:
EUP per cost element x EUC xx
Allocated Cost of Normal Loss
(If WIP, end done with inspection
point – considered as good units) xx
Total WIP, ending xx

Abnormal Loss:
EUP per cost element x EUC xx

FIFO
Transfer Out:
Beginning – Beg. Cost xx
Beginning – Currently done/Work
Done for the period (EUP Beg x EUC) xx
Started and completed
(EUP x EUC of all cost elements) xx