Archive about 'Process Costing'

Frequently Used Terms In Process Costing

Append below a snapshot of some frequently used terms in process costing. Before we go further, we should first understand the term process costing which is “the costing method applicable where goods or services result from a sequence of continuous or repetitive operations or processes. Costs are averaged over the units produced the period”
 
Snapshot of [...]

List Of Topics Under The Heading:Process Costing

Click to the respective topic on Process Costing

Content Page On PROCESS COSTING

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Definition and features of Process costing

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Frequently Used Terms In Process Costing

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Simple Illustration on Process Costing Methodology

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Process Costing With Work-In-Progress- Equivalent Unit

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Process Costing-Normal Loss and Its Treatment

Process Costing:Normal Loss & Its Treatment(Part4)

Accounting For Losses

 In process costing, we can often found the output from a process is less than the input. Where the output from a process is less than the input, there is therefore a loss. 

    Basically there are two types of losses in Process Costing:

Normal loss
Abnormal Loss

                                  Normal Loss

    ·     Normal loss is unavoidable losses arising due [...]

Process Costing With Work-In-Progress: Equivalent Units(Part3)

Earlier article(Part2) deal with a simple process costing without any work-in-progress
In this article, we shall deal with process costing with work-in-progress.

Process Costing With Work-In-Progress

Work-in-progress is really uncompleted units hence this should not receive the full costs of the material, labor and overhead to complete it.
Therefore it’s misleading if for the purpose of calculating average unit [...]

Process Costing-A Simple Illustration(Part2)

Append below a illustration of a simple set of process costing where there are merely two processes, without any work-in-process and finished stock account.

Illustration Of a Simple Process Costing

Process 1
Process 2

Material

15,000

-

Labor
20,000
$25,000

Manufacturing expenses
5,000
$5,000

40,000
$30,000

Production for the period is 1,000 unit.
Show the total cost of the finished goods and the process for each phase of the production
Solution:
PROCESS 1

Units

Cost [...]

Process Costing-Definitions And Features(Part1)

Process Costing

CIMA’s definition:

The costing method applicable where goods or services result from a sequence of continuous or repetitive operations or processes. Costs are average over the units produced during the period, being initially charged to the operation or process.Hence, process costing:
Determines the cost per unit of product in an environment where IDENTICAL product is produced [...]