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Process Costing

Process Costing

Process costing is one of the important methods of costing. This method of costing is normally applicable to the different processes involved while converting a raw material into finished product when the raw material has passed through different stages before completion.

With the help of the process costing, the manufacturer can find out the cost of each process and the cost of the product.

Simply, it refers to find out the cost at different stages of process and cost of product to industries is known as process costing.


Operation costing is “the category of basic costing methods applicable where standardized goods or services result from a sequence of repetitive and more or less continuous operations or processes to which cost are charged before being averaged over the units produced during the period”. [ICMA Definition]

ICMA defines process costing as “that form of operation costing which applies where standardized goods are produced”.