Process Costing

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:32AM in AAT student discussion
Is anyone else doing the ECR exam next week and really struggling with Process Costing? I just about managed to suss it out before WIP came in, but now I'm just getting confused with valuing each unit when taking into account WIP and the different stages... Does anyone have any tips?

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    I'm struggling with this too. We've been told that it's quite likely there could be a lot of process costing in the exam :(
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    Something to look forward to, then!

    Good luck, Gem! If you come across any pearls of Process Costing wisdom, please let me know!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    I have put my out of office on
    If you email me with the subject:
    Layout for process costing WIP questions
    to
    sandy.hood@chichester.ac.uk
    you should get a blank email with an excel layout attachment of how to work out both the cost per unit and the closing working progress for process costing

    Once you have it, by all means send me a question and I will show how to enter the data.

    This is a different approach to Andy Harrington's recent Accounting Technician article so approach with caution. If Andy's approach works for you - then stick with it and don't ask for mine as it might lead to you muddling them up.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    Thanks for the help, Sandy!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    Good luck to you too! :thumbup:
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    I have had a few emails following my offer above.

    Some give me concerns that there are students who do not know what might (and more importantly what WILL NOT) be in the exam.

    Process Costing is a wonderful subject which gets far more fun on CIMA Managerial and ACCA level 2 courses.

    This is a quote taken from:
    http://www.aat.org.uk/servlet/file/Int - Unit 06 ECR guidance.pdf?ITEM_ENT_ID=742&ITEM_VERSION=1&COLLSPEC_ENT_ID=34

    on http://www.aat.org.uk/students/display/store4/item378/

    Process costing will be examined to the following
    extent:
    • The organisation will have no more than two processes.
    • The student should be able to prepare process, normal loss, abnormal loss and
    abnormal gain accounts when there is no ending work in progress. This will include
    accounting for scrap sales.
    • The calculation of unit costs where there is closing work in progress but neither
    opening work in progress nor process losses.
    • By products and joint products will not be examined.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    So any questions that you do where there is both closing WIP AND losses in the same account, will be lovely preparation for CIMA/ACCA but not be tested in ECR.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Process Costing

    Thanks for the info and help Sandy! I finally sussed out a few questions using normal losses, abnormal losses, WIP and scrap that were in my textbook. Used Andrew harrington's guidance in October 06 Accounting Technician as a good base. Pity I am doing ACA after AAT as my colleagues seem to think it is not involved on the ACA courses very much at all!

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