# Chapter 8

## 6 terms

### Assigning Costs to WIP and FGI

(1) Summarize the flow of physical units
(2) Compute the equivalent number of units produced
(3) Summarize the total costs to be accounting for; these are the sums of the costs in beginning inventory and the costs incurred in the department during the period.
(4) Compute costs per equivalent unit
(5) Assign costs to goods transferred out (completed) and to ending WIP inventory (not completed)

### (1) Summarize the flow of physical units

Basic cost-flow model:
Beginning inventory + Transfers in - Transfers Out = Ending inventory

### (2) Compute the Equivalent Number of Units Produced

Represents the amount of work actually performed on products not yet completed translated to the work required to complete an equal number of whole units.

### Cost Analysis

Assigning costs to the inventory levels in Direct Materials, Conversion, and WIP

### Weighted-average costing

An inventory method that combines the costs in beginning inventory with costs incurred during the period to compute unit costs.

### Applying the Basic Cost-Flow Model

Beginning balance (BB) + Transfers in (TI) - Transfers out (TO) = Ending balance (EB)
BB + TI = EB + TO