Accounting › Section R · Job order and process costing › Topic R.8
Equivalent units in later processes
A second department never starts from scratch: every unit it receives arrives carrying the cost of the work already done on it. Handling that transferred-in cost as a category of its own is the one new idea needed to cost later processes.
In this topic
- Units that arrive with a cost
- Transferred-in cost as a category
- Materials added at the end
- Worked example: Packaging, steps 1 and 2
- The costs to account for
- Worked example: Packaging, steps 3 and 4
- Materials added part-way
- Building the full unit cost
- Common mistakes to avoid
- Key takeaways
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