follows:
a) Reconcile the physical units (units to account for and units accounted for).
b) Why do you think it's important for a business to reconcile the physical units in (a)
above if we're going to do the rest with equivalent units?
c) Determine TOTAL costs to account for.
d) which costs will be traced? Which costs will be the "blob(s)" which will be allocated
and form the cost pool(s)?
e) Compute the allocation base - the equivalent units of production for both materials
and conversion
f) Compute the allocation rate the cost per equivalent unit for both materials and
conversion
g) Determine the cost of goods transferred and ending work-in-process inventory
Fig: 1