Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
Assembly


Testing

40%

60%

DM
Opening WIP
DM
Added

Added

SC
Closing WIP The timeline shows that during March, Euro-Défense finished the opening WIP by adding the remaining 40% of the CC (all DM were added to the opening WIP during February. They started and completed units, adding 100% of both DM and CC. Finally, they started closing
WIP by getting these units 40% of the way through the Assembly process. These closing WIP units have all their DM and 40% of their CC. In April, Euro-Défense will finish these units by adding the remaining 60% of the CC.
Comparison of weighted-average and FIFO methods
In the Euro-Défense example, the unit cost declines overtime. This is consistent with the continuous improvement theme highlighted in Chapter 1. It should be clear to students from their financial accounting courses that when costs are declining, FIFO yields the lowest stock valuation (because the latest, lowest cost units are still in closing stock) and the highest CGS.

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