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Process

Process. Costing. Cost. COST: Also responsible for FIFO Method. Page 1. How much does it cost?. Process costing is used for certain types of products: Continuous flow of units Indistinguishable from one another (i.e., “homogenous” products). department.

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Process

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  1. Process Costing Cost COST: Also responsible for FIFO Method Page 1

  2. How much does it cost? • Process costing is used for certain types of products: • Continuous flow of units • Indistinguishable from one another • (i.e., “homogenous” products) department rather than by job (i.e., job-order costing) Page 2

  3. Have students find and reference earlier page with this material ABC Costing Process Costing Job-Order Costing distinct products homogeneous products e.g., house construction oil wells shipbuilding PC mfg. (e.g., Dell) e.g., bricks soda paint oil refining Job $ / # units = cost per unit Dept. $ / # units = cost per unit Page 3

  4. Usually textbook problems involve sequential processing, but many companies also perform parallel processing Page 4

  5. If all work had been done on finished units, how many would be done? Tom Sawyer How many pickets (EU) of the the picket fence were painted green/gray by Tom Sawyer? Page 5

  6. The John Company ??? Page 6

  7. Page 7

  8. Cost Process Costing • IN CLASS: • The John Company • Wtd. Avg. • Be sure to demonstrateALL of FIFO • EXTRA: • Steinmueller Steins, Inc. • Candlelight Candles Co. • Cutting Edge Skis Page 8

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