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What do you mean by process costing?

In: Business & Finance, Business Accounting and Bookkeeping [Edit categories]

Answer:

Process Costing is the accounting of those industries which are involved in those products production which has no specific or clear start of fiscal year or accounting year because they are continuously involved in producing products like textile industries or manufacturing industries. In these industries work is done in more then one departments and products have to go through many departments to complete and in this process each department don't know how much cost they have incurred on that product to complete and as that product is complete in more then one department so it is not possible to allocate all costs and revenues to one department so process costing is used to continuously calculate that how much cost is incurred in which department so that the revenues and responsibilities are also allocated to those departments accordingly.

First answer by Jabirshah. Last edit by Jabirshah. Contributor trust: 182 [recommend contributor ]. Question popularity: 153 [recommend question].

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