The five steps of the process costing procedure are scrambled below: 1. Assign total costs to units completed and to units in ending WIP Inventory.
2) Summarize total costs to account for.
3) Compute the cost per equivalent unit.
4) Summarize the flow of physical units.
5) Compute output in terms of equivalent units.
The correct order for these steps is:
A)3, 1, 4, 2, 5.
B)5, 3, 1, 4, 2.
C)2, 4, 5, 1, 3.
D)4, 5, 2, 3, 1.

Question

Quizplus · Accepted Answer

The correct order starts with summarizing the flow of physical units to understand the production activity. Next, computing output in terms of equivalent units adjusts for the varying stages of completion. Summarizing total costs to account for gathers all costs involved in production. Computing the cost per equivalent unit divides total costs by equivalent units. Finally, assigning total costs to units completed and to units in ending WIP Inventory allocates costs based on the computed cost per equivalent unit.

The Five Steps of the Process Costing Procedure Are Scrambled