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  • CPR Costing Summary

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    nica tan
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    This document summarizes the key differences between actual and normal costing methods for various types of production variances like spoilage, rework, scrap, and waste. For spoilage, actual costing allocates costs to finished goods, work in progress, and defective units based on expected unit production, while normal costing always allocates spoilage costs to finished goods overhead costs. For rework and deficiencies, actual costing allocates costs differently based on whether they are regular or irregular, while normal costing generally charges costs to finished goods overhead. Material scrap and waste are recognized differently between the two methods in costs to account for and allocate.

    Descrizione originale:

    Notes summarizing accounting treatment for a Cost Process Report in Cost Accounting

    Titolo originale

    Summary of CPR

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    This document summarizes the key differences between actual and normal costing methods for various types of production variances like spoilage, rework, scrap, and waste. For spoilage, actual costing allocates costs to finished goods, work in progress, and defective units based on expected unit production, while normal costing always allocates spoilage costs to finished goods overhead costs. For rework and deficiencies, actual costing allocates costs differently based on whether they are regular or irregular, while normal costing generally charges costs to finished goods overhead. Material scrap and waste are recognized differently between the two methods in costs to account for and allocate.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
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    13 visualizzazioni1 pagina

    CPR Costing Summary

    Caricato da

    nica tan
    This document summarizes the key differences between actual and normal costing methods for various types of production variances like spoilage, rework, scrap, and waste. For spoilage, actual costing allocates costs to finished goods, work in progress, and defective units based on expected unit production, while normal costing always allocates spoilage costs to finished goods overhead costs. For rework and deficiencies, actual costing allocates costs differently based on whether they are regular or irregular, while normal costing generally charges costs to finished goods overhead. Material scrap and waste are recognized differently between the two methods in costs to account for and allocate.

    Copyright:

    © All Rights Reserved
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    di 1

    SUMMARY OF CPR

    TYPE ACTUAL COSTING NORMAL COSTING


    Spoilage Normal
    Neglect Not included in units to account for or EUP and just ignored Not included in units to account for or EUP and just ignored
    Explicit Included in units to account for and EUP Included in units to account for and EUP
    If inspection point is 100%, spoilage cost is allocated to FG Spoilage is never allocated and is always just FG even if inspection
    If inspection point is less than 100%, allocate to FG and point is less than 100%
    WIP, end based on EUP Spoilage costs are charged to FOHC
    If spoilage is alllocated to WIP, beg also, units of WIP, beg are always
    the whole value since spoilage could have occurred in the last period
    but only detected this period
    If there is DUI, spoilage is also allocated to DUI based on EUP
    SV is allocated based on gross spoilage
    Spoilage costs are charged to FG
    Abnormal
    Neglect Always included in units to account for and EUP Always included in units to account for and EUP
    Spoilage costs are recognized as Loss from Abnormal Spoilage Spoilage costs are recognized as Loss from Abnormal Spoilage
    Explicit Neglect and explicit are the same Neglect and explicit are the same
    Rework Always 100% completion since it's already a completed unit, just needs to be reworked on
    Rework cost is only included in costs to account for and costs accounted for
    Never distributed so never affects EUP
    Regular
    Normal Rework cost charged to FG Rework cost charged to FOHC
    Abnormal Rework cost charged to Loss from Abnormal Rework Rework cost charged to Loss from Abnormal Rework
    Irregular
    Normal Rework cost absorbed by DUI Rework cost charged to FOHC
    Deficiency absorbed by good units Deficiency absorbed by good units
    DUI Always part of units to account for as irregular units DUI Always part of units to account for as irregular units
    Cost Cost
    Spoilage Spoilage and rework are not added since
    Rework they are already estimated in FOHC
    Base cost
    Recognize DUI at the lower to cost or NRV Recognize DUI at the lower to cost or NRV
    Deficiency Deficiency
    Allocated based on units of rework Allocated based on units of rework
    Normal Charged to FG Normal Charged to FG
    Abnormal Loss from Abnormal Deficiency Abnormal Loss from Abnormal Deficiency
    Total FG Total FG
    WIP, beg WIP, beg
    Work on WIP, beg Work on WIP, beg
    Completed and transferred out Completed and transferred out
    Normal spoilage Normal deficiency
    Regular normal rework
    Normal deficiency
    Abnormal Rework cost charged to Loss from Abnormal Rework Rework cost charged to Loss from Abnormal Rework
    Deficiency charged to Loss from Abnormal Deficiency Deficiency charged to Loss from Abnormal Deficiency
    Scrap Immaterial Treated as miscellaneous revenue and ignored on CPR Treated as miscellaneous revenue and ignored on CPR
    Cash xx Cash xx
    Scrap sale xx Scrap sale xx
    Material Recognized in costs to account for and spread Recognized in costs to account for but not spread since already
    Deducted from DM included in OH
    Since already spread to EUP, not recognized in costs accounted for Included in costs accounted for
    Cash xx Cash xx
    WIP xx FOHC xx
    Waste Immaterial Treated as miscllaneous expense and ignored on CPR Treated as miscllaneous expense and ignored on CPR
    Waste disposal expense xx Waste disposal expense xx
    Cash/A/P xx Cash/A/P xx
    Material Recognized in costs to account for and spread Recognized in costs to account for but not spread since already
    Deducted from CC included in OH
    Since already spread to EUP, not recognized in costs accounted for Included in costs accounted for
    WIP xx FOHC xx
    Cash/A/P xx Cash/A/P xx

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