Application of Process Costing
Process costing is applicable in certain industries. Those industries are:
- Biscuit works
- Paper mills
- Sugar mills
- Chemical works
- Oil refining
- Distillation process
- Soap making
- Meat Products Factory
- Varnishing industry
- Dairy factory
- Paint and Ink making company
- Spinning
- Coke Works
- Industries related to food products
- Gas manufacturing companies
- Textile industry
- Weaving company
Industries use the method of process costing in single merchandise production and also in the production of various bulk materials and goods.
Features of Process Costing
- It explains the core of process cost.
- The flow in production takes place without any interruption. It is due to the process chain with whose help;the outcome is the final product.
- Any unusual profit or loss should be attended appropriately using the process of process costing.
- There are no separate divisions in the production of product or by-product. Different manufactured goods with its secondary product are generated at more than one phases of mass production.
- With the help of this method, production houses can easily calculate the production of functional units. They can also estimate those inputs which did not get turned into finished commodities.
- During more than one process, every unit and completed products are invariable and similar after production.
- A process can use a different process output as raw material for their production.
Links of Previous Main Topic:-
- Introduction to accounting and branches of accounting
- Preparation of final accounts
- Introduction of fund flow statement
- Introduction cash flow statement
- Ratio analysis significance of ratio analysis
- Fixed assets and depreciation meaning causes objectives methods and basic factor
- Cost accounting concept objectives advantages limitations general principles and cost sheet
- Introduction process costing
Links of Next Finance Topics:-
- Elements of production cost
- Differences between process costing and job costing
- Test questions in process costing
- Activity based costing introduction concept and classification
- Introduction inventory pricing and valuation
- Standard costing introduction
- Management accounting
- Marginal costing
- Relevant cost for decision making
- Budget and budgetary control
- Limitations of historical accounting
- Introduction to responsibility accounting
