Features of Process Costing

Process costing can be defined as costing method which ascertains the cost of a product at the stage of manufacturing. In simple words under process costing the product of one process becomes the input of next process. Here is the list of the features of process costing –

1. Production under process costing is done through continuous flow of products which are identical or homogeneous.

2. Costs are computed periodically and also average cost can be easily computed under this method of costing.

3. Under this cost data is available process as well as departments thus enabling a better control over costs by the management.

4. In process costing sometimes by-products may emerge which have to be further processed in order to make them marketable and hence accordingly accounting adjustment needs to be made for such by- products.

5. There is always some work in progress under proves costing both at the beginning and at the end of the accounting period because it is a continuous process.

Comments on this entry are closed.

  • Asuquo Godwin Link

    It is an understanding material to read thanks a lot.