ECONOMICS

Detailed explanation-1: -Step 1: summarize the flow of physical units. Step 2: Compute output in terms of equivalent units. Step 3: Calculate costs per equivalent unit costs. Step 4: Summarize total costs to account for.

Detailed explanation-2: -The overhead account is debited for the actual overhead costs as incurred. The overhead account is credited for the overhead costs applied to production in the work-in-process account.

Detailed explanation-3: -In accounting, process costing is a method of assigning production costs to units of output. In process costing systems, production costs are not traced to individual units of output. Costs are assigned first to production departments. Then assign the costs to units of output as they move through the departments.

Detailed explanation-4: -Under the FIFO method of process costing, costs are transferred to next department and ultimately to finished goods in the order in which they entered the current department i.e. costs entering first are transferred first and hence the name FIFO–first-in-first-out.