Answer:
Process:
A process is a series of activities (operations) that are linked to perform a specific objective. For example, B Company, a manufacturer of wide variety of over-the-counter medications vitamins, uses process costing in its plants. Its different processes for production of one of the medications are given as under:
Example:
Blending, encapsulating bottling are the three processes. Each process consists of four linked activities as described above.
Answer:
Production report and its purposes:
The production report summarizes the manufacturing activity occurring in a department for a given period.
It discloses information concerning the physical flow of units, equivalent units, unit costs, and disposition of manufacturing costs associated with the period.
A production report prepared according to FIFO method separated the cost of BWIP from the cost of the current period.
1) BWIP is assumed to be completed and transferred out first.
2) Cost from BWIP is not pooled with the current period costs in computing unit cost. Additionally, equivalent units of production exclude work done in the prior period.
3) When calculating the cost of goods transferred out, the prior period casts are added to the costs of completing the units in BWIP, and then these costs are added to the costs of units started and completed.
A production report prepared according to Weighted Average Method do not separated the cost of BWIP from the cost of the current period.
1) Cost from BWIP is pooled with the current period costs in computing unit cost. Additionally, equivalent units of production include work done in the prior period.
2) When calculation the cost of goods transferred out, the prior period costs are added to the current costs of completing the units.
Answer:
Equivalent unit calculation is affected when isolated equivalent units are not computed for conversion costs and direct materials and results will not be clear and reliable. Therefore, it is important to calculate separate equivalent units for direct materials and conversion costs in order to eliminate this effect.
There is no answer for this question
There is no answer for this question