SISTEM PENGEKOSAN - PROSES (Process Costing System)

1. SISTEM PENGEKOSAN - PROSES(Process Costing System) Kuliah 3.2 ACT 2131 Perakaunan Kos dan Pengurusan Ainun Haji Abdul Majid

2. Systems Design:Process Costing Chapter Four

3. Both systems assign material, labor and overhead costs to products and they provide a mechanism for computing unit product cost. Both systems use the same manufacturing accounts, including Manufacturing Overhead, Raw Materials, Work in Process, and Finished Goods. The flow of costs through the manufacturing accounts is basically the same in both systems. Similarities Between Job-Order and Process Costing

4. Process costing is used when a single product is produced on a continuing basis or for a long period of time. Job-order costing is used when many different jobs are worked on each period. Process costing systems accumulate costs by department. Job-order costing systems accumulated costs by individual jobs. Process costing systems use department production reports to accumulate costs. Job-order costing systems use job cost sheets to accumulate costs. Process costing systems compute unit costs by department. Job-order costing systems compute unit costs by job. Differences Between Job-Order and Process Costing

5. Quick Check  Process costing is used for products that are: a. Different and produced continuously. b. Similar and produced continuously. c. Individual units produced to customer specifications. d. Purchased from vendors.

6. What is a Processing Department? Any location in an organization where materials, labor or overhead are added to the product. The activities performed in a processingdepartment are performed uniformly on allunits of production. Furthermore, the output ofa processing department must behomogeneous.

7. Sequential vs. Parallel Processing Sequential processing means that unitsflow in a sequence from onedepartment to another. Parallel processing is used whenafter a point, some units go throughdifferent processing departments than others. For example, apetroleum refinery separates crudeoil into products like gasoline, jetfuel, and heating oil.

8. FinishedGoods Work inProcess Cost of GoodsSold Comparing Job-Orderand Process Costing Direct Materials Direct Labor ManufacturingOverhead

9. Comparing Job-Orderand Process Costing Costs are traced andapplied to individualjobs in a job-ordercost system. Direct Materials FinishedGoods Jobs Direct Labor ManufacturingOverhead Cost of GoodsSold

10. Comparing Job-Orderand Process Costing Costs are traced and applied to departments in a process cost system. Direct Materials FinishedGoods Processing Department Direct Labor ManufacturingOverhead Cost of GoodsSold

11. T-Account and Journal Entry Views of Cost Flows For purposes of this example, assume there are two processing departments – Departments A and B. We will use T-accounts and journal entries.

12. Direct Materials • DirectMaterials • Direct Materials Process Cost Flows(in T-account form) Work in Process Department A Raw Materials Work in Process Department B

13. Process Cost Flows(in journal entry form)

14. Direct Labor • Direct Labor • Direct Labor Process Cost Flows(in T-account form) Work in Process Department A Wages Payable • Direct Materials Work in Process Department B • Direct Materials

15. Process Costing(in journal entry form)

16. Process Cost Flows(in T-account form) Work in Process Department A • Direct Materials Manufacturing Overhead • Direct Labor • Actual Overhead • OverheadApplied to Work inProcess • AppliedOverhead Work in Process Department B • Direct Materials • Direct Labor • AppliedOverhead

17. Process Costing(In journal entry form)

18. Transferred to Dept. B • Transferred from Dept. A Process Cost Flows(in T-account form) Work in Process Department B Work in ProcessDepartment A • Direct Materials • Direct Materials • Direct Labor • Direct Labor • AppliedOverhead • AppliedOverhead

19. Process Costing(in journal entry form)

20. Cost of GoodsManufactured Process Cost Flows(in T-account form) Work in Process Department B Finished Goods • Direct Materials • Cost of Goods Manufactured • Direct Labor • AppliedOverhead • Transferred from Dept. A

21. Process Costing(in journal entry form)

22. Process Cost Flows(in journal entry form) Work in Process Department B Finished Goods • Direct Materials • Cost of Goods Manufactured • Cost of GoodsManufactured • Cost of GoodsSold • Direct Labor • AppliedOverhead • Transferred from Dept. A Cost of Goods Sold • Cost of GoodsSold

23. Process Costing(in journal entry form)

24. Equivalent Units of Production Equivalent units are the product of the number of partially completed units and the percentage completion of those units. We need to calculate equivalent units because a department usually has some partially completed units in its beginning and ending inventory.

25. + = 1 Equivalent Units – The Basic Idea Two half completed products are equivalent to one completed product. So, 10,000 units 70% completeare equivalent to 7,000 complete units.

26. Quick Check  For the current period, Jones started 15,000 units and completed 10,000 units, leaving 5,000 units in process 30 percent complete. How many equivalent units of production did Jones have for the period? a. 10,000 b. 11,500 c. 13,500 d. 15,000 10,000 units + (5,000 units × 0.30) = 11,500 equivalent units

27. Calculating Equivalent Units Equivalent units can be calculated two ways: The First-In, First-Out Method – FIFO is covered in the appendix to this chapter. The Weighted-Average Method – This method will be covered in the main portion of the chapter.

28. Costs for the periodEquivalent units of productionfor the period Cost perequivalent unit = Equivalent Units of ProductionWeighted-Average Method • The weighted-average method . . . • Makes no distinction between work done in prior or current periods. • Blends together units and costs from prior and current periods.

29. Process Costing and Direct Labor DirectMaterials Direct labor costsmay be smallin comparison toother product costs in processcost systems. Conversion Dollar Amount DirectLabor Type of Product Cost

30. Process Costing and Direct Labor DirectMaterials Direct labor costsmay be smallin comparison toother product costs in processcost systems. Conversion Dollar Amount Type of Product Cost Direct labor and manufacturing overhead may becombined into one product cost called conversion.

31. Weighted-Average Example Smith Company reported the following activity in Department A for the month of June:

32. Weighted-Average Example The first step in calculating the equivalent units is to identify the units completed and transferred out of Department A in June (5,400 units)

33. Weighted-Average Example The second step is to identify the equivalent units of production in ending work in process with respect to materials for the month (540 units) and add this to the 5,400 units from step one.

34. Weighted-Average Example The third step is to identify the equivalent units of production in ending work in process with respect to conversion for the month (270 units) and add this to the 5,400 units from step one.

35. Weighted-Average Example Equivalent units of production always equals: Units completed and transferred + Equivalent units remaining in work in process

36. Weighted-Average Example Materials 6,000 Units Started EndingWork in Process900 Units60% Complete BeginningWork in Process300 Units40% Complete 5,100 Units Startedand Completed 5,400 Units Completed 5,400 Units Completed 900 × 60% 540 Equivalent Units 5,940 Equivalent units of production

37. Weighted-Average Example Conversion 6,000 Units Started EndingWork in Process900 Units30% Complete BeginningWork in Process300 Units20% Complete 5,100 Units Startedand Completed 5,400 Units Completed 900 × 30% 270 Equivalent Units 5,670 Equivalent units of production

38. Production Report • A quantity schedule showing the flow of units and the computation of equivalent units. Section 1 • A computation ofcost per equivalent unit. Section 2 Section 3 Production Report – Weighted-Average

39. Production Report Section 1 Section 2 Section 3 Production Report • Cost Reconciliation section shows the reconciliation of all cost flows into and out of the department during the period.

40. Production Report Example • Assume that Double Diamond Skis uses the weighted-average method of process costing to determine unit costs in it Shaping and Milling Department.

41. Production Report Example Work in process, May 1: 200 units Materials: 55% complete $ 9,600 Conversion: 30% complete 5,575 Production started during May 5,000 units Production completed during May 4,800 units Costs added to production in May Materials cost $ 368,600 Conversion cost 350,900 Work in process, May 31 400 units Materials: 40% complete Conversion: 25% complete

42. Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units.

43. Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units.

44. Production Report Example Step1: Prepare Quantity Schedule with Equivalent Units.

45. Costs for the periodEquivalent units of productionfor the period Cost perequivalent unit = Step 2: Calculating the Costs Per Equivalent Unit To calculate the cost per equivalent unit for the period:

46. Production Report Example Step 2: Compute the cost per equivalent unit.

47. $378,200 ÷ 4,960 units = $76.25 Production Report Example Step 2: Compute the cost per equivalent unit.

48. $356,475 ÷ 4,900 units = $72.75 Production Report Example Step 2: Compute the cost per equivalent unit.

49. 4,800 units @ $149.00 Production Report Example Step 3: Prepare a Cost Reconciliation

50. Production Report Example Step 3: Prepare a Cost Reconciliation All costs accounted for