What are the calculation methods of product cost?

(1) Not included in the WIP cost method is not included in the WIP cost method. It refers to the method that although there are WIP at the end of the month, the number of WIP is very small and the value is very low, so the number of WIP at the end of each month is not much different, so it cannot be included in the WIP cost. Under this method, the production cost of a product in the current month is all included in the cost of finished products in the current month. This method is suitable for enterprises or workshops with few products at the end of the month. Its purpose is to simplify accounting work. Such as power generation, coal mining, tap water production and other enterprises can adopt this method. (2) Calculation method of year-end (fixed) products The calculation method of year-end (fixed) products means that the product cost at the end of each month is calculated and fixed at the beginning of the year. The monthly cost of finished products is the production cost that occurred in that month. This method is suitable for products with less or more products at the end of the month, but the number of products at the end of the month does not change much, and the difference between the product cost at the end of the month and the end of the month has little effect on the cost of finished products. For example, the number of WIP with fixed container devices such as blast furnace ironmaking, open hearth steelmaking and chemical plants in smelting enterprises is relatively stable, so the cost of WIP can be calculated by this method. However, the cost of WIP at the end of each year must be recalculated according to the actual quantity of WIP at the end of each year to ensure the relative accuracy of product cost accounting. If the price changes greatly, the product cost (fixed) at the beginning of the year may be inaccurate, so this method should be used with caution. (3) The calculation method of raw material cost of WIP refers to the calculation method of raw material cost of WIP at the end of the month, and other expenses are borne by the cost of finished products. The total production cost of a product, minus the product cost calculated according to the cost of raw materials, is the total cost of finished products. This method is suitable for products with a large number of products, which change greatly at the end of the month, but raw materials account for a large proportion of product cost. Such as textile, paper making, wine making and other enterprises, this method can be used to simplify accounting work.

(4) Equivalent Output Method The equivalent output method is to convert the actual balance of work-in-process at the end of the month into the equivalent output of finished products according to the degree of completion, and then allocate and calculate the cost of finished products and work-in-process at the end of the month according to the ratio of the output of finished products to the equivalent output of work-in-process. (5) Work-in-process is calculated according to norm cost calculation method, and work-in-process is calculated according to norm cost calculation method, that is, the cost of work-in-process at the end of the month is calculated according to its quantity and the pre-approved work-in-process unit norm cost.

(6) Work-in-process is calculated according to the cost of finished products. Work-in-process is calculated according to the cost of finished products, that is to say, at the end of the month, work-in-process is regarded as finished products, and the cost is shared equally with finished products. This method is suitable for products that are nearly completed at the end of the month, but have not been packaged or accepted for storage. Because the cost of WIP at this time is close to the cost of finished products, in order to simplify the accounting procedures, WIP can be regarded as finished products, and the cost of each cost item can be allocated according to the proportion of finished products and WIP, so as to calculate the cost of finished products and finished products.