CMA Study Group

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  • 1.  PROCESS COSTING. PART 1 HELP

    Posted 04-26-2022 03:06 PM

    i want to understand why they didn't take into consideration the BWIP in calculating the equiv units.? 


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    Tayba Al-Mehdar
    Controller
    Khobar
    Saudi Arabia
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  • 2.  RE: PROCESS COSTING. PART 1 HELP

    Posted 04-27-2022 02:26 AM
    We only use the beginning inventory when we are using FIFO method and when using the weighted average we ignore it

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    Ahmad Salou
    Student
    Amman
    Jordan
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  • 3.  RE: PROCESS COSTING. PART 1 HELP

    Posted 04-27-2022 02:47 AM
    Hello Tayba,

    They already took the BWIP into Consideration when they Took the Total amount of Completed Units, 
    Completed Units Equals (BWIP + Started & Completed) or (BWIP + Started - EWIP)
    In the Weighted-Average Method Qs, you have to look for the Completed units as a Total and Forget about the beginning WIP, Because he only Considers the Completed & EWIP as An  " Average ", that's why it's called Weighted average, So in this case, 
    Completed units are equal 184,000
    EWIP = 48,000 * 40% = 19,200
    So the Total EUP = 203,200 
    Dividing all the beginning and Incurred CC(DL +MOH) = 609,600 $
    It will result in (609,600$/203,200)= 3$ per EUP