Introduction – Process Costing

Process Costing

Process costing is used as one of the imperative techniques to calculate costing. There are various stages through which raw materials pass and then finally gets converted into a completed product. In all this process, the method of costing is used.

It is with the help of process costing, a manufacturer can calculate the totality involved in process and product costing.

In simplified form, it is a procedure used in business houses to detect budget at different phases of various process and its cost involved in product manufacturing.


According to the given definition of ICMA, process costing is referred as one of the forms of operation costing applicable to the production of standardized goods.

Operation costing is defined as a combination of process and job costing which is used in any of them in either situation.

Outcome of repetitive or nearly continuous operational arrangement is related to standardized services or goods in  an industry. Costs are charged in these processes, and it is averaged over items at the time before the final production takes place. The basic costing method category involved in this entire process is stated to be operation costing in a business.


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