Cost Accounting – 12th Edition
Ch 17 Terms
Equivalent units – Derived amount of output units that (a) takes the quantity of each input (factor of production) in units completed or incomplete units of work in process, and (b) converts the quantity of input into the amount of completed output units that could be made with that quantity of input.
First-in, first-out (FIFO) process-costing method –Method of process costing that assigns the
cost of the previous accounting period’s equivalent units in beginning
work-in-process inventory to the first units completed and transferred out of
the process, and assigns the cost of the equivalent units worked on during the
current period first to complete beginning inventory, next to start and
complete new units, and finally to units in ending work-in-process inventory.
Hybrid-costing system – Costing system that blends characteristics from both job-costing systems and process-costing systems.
Operation – A standardize method or technique that is performed repetitively, often on different materials resulting in different finished goods.
Operation-costing system – Hybrid-costing system applied to batches of similar, but not identical products. Each batch of products is often a variation of a single design and it proceeds through a sequence of operations but each bath does not necessarily move through the same operations as other batches. Within each operation, all product units use identical amounts of the operation’s resources.
Transferred-in costs – Costs incurred in previous departments that are carried forward as the product’s costs when it moves to a subsequent process in the production cycle. Also called previous department costs.
Weighted-average process-costing method – Method of process costing that assigns the equivalent-unit cost of the work done to date (regardless of when it was done) to equivalent units completed and transferred out of the process and to equivalent units in ending work-in-process inventory.