Process costing
This query is : Resolved
12 April 2014
Hello,Could you please explain me the difference between FIFO and Weighted Average Method. Also how cost per unit is calculated while using Weighted Average Method in Process Costing?
12 April 2014
under fifo method you can take value of last purchase
and under weighted average method
unit no X cost per unit= product / total unit
and under weighted average method
unit no X cost per unit= product / total unit
12 April 2014
That means, we do not include purchases or units introduced in weighted average method as we do in FIFO while calculating cost per unit??
13 April 2014
You need to calculate the units introduced in the process costing while follow FIFO or weighted average method. otherwise you cannot arrive the correct cost
13 April 2014
@ramesh krishnan: Ok sir then,whats the difference between them?
14 April 2014
Here there are two types of valuation coming out. your query about the input material valuation then
the value of input need to be taken under FIFO as explained by Mr.Rupesh, value of purchase of latest price of inputs. under weigheted average, total value of materials need to be divided by the input units purchased.
If your question is about the valuation of output units coming out from process, then calculation as follows
Need to add the following
1. Value of Materials ( Either FIFO or weighted average as you like)
2. Labour
3. Other direct & indirect overheads related to that particular process
after adding those and divided by the number of units output which you got. ( subject to abnormal loss)
the value of input need to be taken under FIFO as explained by Mr.Rupesh, value of purchase of latest price of inputs. under weigheted average, total value of materials need to be divided by the input units purchased.
If your question is about the valuation of output units coming out from process, then calculation as follows
Need to add the following
1. Value of Materials ( Either FIFO or weighted average as you like)
2. Labour
3. Other direct & indirect overheads related to that particular process
after adding those and divided by the number of units output which you got. ( subject to abnormal loss)
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GSTR-1A How to update Invoice
- Excess salary payment.
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Stamp Paper for partnership firm change new income tax 2025
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Capital gain from sale of house property
- TDS on Purchase of Immovable Property by NRI from NRI
- Regarding TDS Applicability For Director Remuneration
- FORM 26A APPLICABILITY
- When TDS on GST applied
- TDS APPLICABILITY......
- Copyright software
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
