Question

The four steps necessary to complete a cost of production report in a process cost system are 1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production the correct ordering of the steps is 2, 3, 4, 1 2, 4, 3, 1 4, 2, 3, 1 2, 3, 1, 4

Answer 1

The 1st step in making a cost of production report is to determine the units to be assigned with costs. Next would be to calculate the total units of production. After that, we can determine the cost per equivalent unit by simply dividing the total cost with the total units produced. Finally, allocate some costs to units which are already completed and transferred to other department.

Therefore the correct sequence is:

2, 4, 3, 1