iv、Brief introduction to the cost calculation logic.
1.WIP equivalent unit and equivalent unit
In order to make the unit cost of manufacturing orders closed at the end of
the month closer to the actual cost, the equivalent unit of finished products
estimated to be completed of the WIP is known as [WIP equivalent unit].
For instance, the production of one manufacturing order commences in the
month, and 100 pcs are produced upon completion at the end of the month,
NTD1000 of labor cost is consumed, the manufacturing overhead is NTD300
and the requisition cost is NTD5,000; Hence, we can calculate the unit cost
of the product =
If the production of the manufacturing order commences in the month; only
60 pcs are delivered at the end of the month; the actual requisition of the
month is 100 sets; the labor cost input is NTD900; the manufacturing
overhead is NTD 280; the requisition cost is NTD 5,000; there are 40 pcs not
completed on the site; and the rate of completion is 80% (indicating that all
of them can be completed suppose a few more working hours are input), how
much do you think is the actual cost of the product?
Do you think NTD103 is reasonable? Why?
The meaning it represents is known as [WIP equivalent unit], namely [WIP]
quantity on the site, i.e. the quantity of products completed?
* WIP problems occur when the manufacturing orders of the month are not
completed.
* There are many bases for measurement of WIP equivalent units. The
customer can, according to its own status, assume 60+32=92 pcs. The
quantity represented by it is known as [equivalent unit] = [actual production
quantity] + [WIP equivalent unit]