Physical Flow Schedule, Equivalent Units, and Unit Costs

A physical flow schedule shows the units to account for and also accounts for themregardless of their stage of completion. It is the first of five steps for process costing. There are two sections to the schedule:

Physical Flow Schedule
Units to Account for:
- Select your answer -Units in BWIPUnits in EWIPItem 1		xxxxx
Units started		xxxxx
Total units to account for		xxxxx
Units accounted for:
Units Completed:
From: - Select your answer -BWIPEWIPItem 2	xxxxx
Started and completed	xxxxx	xxxxx
Units in - Select your answer -BWIPEWIPItem 3		xxxxx
Total units accounted for		xxxxx

Equivalent units are the complete units that could have been produced given the total amount of producing effort expended for the period under consideration. Preparing a schedule of equivalent units is the second of five steps of process costing. Equivalent units measure the - Select your answer -units in processoutput of the periodtotal units to account forItem 4 . A fully completed unit is counted as a unit of output. Output in ending work in process is counted by its degree of completion. If, for example, production inputs are applied uniformly, then saying that work in process is 25 percent complete means that 25 percent of the direct materials, direct labor, and overhead have been used and that another 75 percent are needed to finish the units. If there is no BWIP, and if all manufacturing inputs are applied uniformly for a process, the calculation for equivalent units is as follows:

Equivalent Units Schedule
- Select your answer -Units to Account ForUnits CompletedItem 5	xxxxx
Units in EWIP Fraction complete	xxxxx
Equivalent units	xxxxx

However, if materials are added at the beginning or end of the process then there will be - Select your answer -similardifferentItem 6 completion percentages for materials and conversion costs. Typically, conversion costs are added - Select your answer -at discrete pointsuniformlyItem 7 and materials are added - Select your answer -at discrete pointsuniformlyItem 8 in the production process. Assuming that conversion is less than 100 percent at a given point in time, materials added at the beginning are - Select your answer -100 percent complete0 percent completeItem 9 and materials added at the end are - Select your answer -100 percent complete0 percent completeItem 10 . If there is no BWIP and inputs are not added uniformly, then equivalent units are calculated for each type of input as follows:

	Direct Materials		Conversion Costs
- Select your answer -Units to Account ForUnits CompletedItem 11	xxxxx		xxxxx
Units in EWIP Fraction complete	xxxxx		xxxxx
Equivalent units	xxxxx		xxxxx

In principle, calculating unit costs in a process-costing system is very simple. First, measure the manufacturing costs for a process department for a given period of time. Second, measure the output for the process department for the same period of time. Finally, the unit cost for the process department is computed by dividing the - Select your answer -costs of the completed job by the job's outputcosts of the period by the output of the periodItem 12 . Thus, for the scenario where there is no BWIP and inputs are applied uniformly, we have the following formula:

Unit cost = Total Production Costs/Equivalent Units

If, on the other hand, inputs are not applied uniformly, a unit cost is calculated for each input. For this scenario--where there is no BWIP and inputs are not all applied uniformly, the following formula is used:

Unit cost = (Direct materials cost/Equivalent Units of Materials) + (Conversion Cost/Equivalent Units of Conversion)

or

Unit cost = Unit Materials Cost + Unit Conversion Cost