Process Costing
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What is meant by process costing?
Process costing is a method of costing used mainly in manufacturing where units are continuously mass-produced through one or more processes. ... The method used is to take the total cost of the process and average it over the units of production.What are the steps in process costing?
Follow the 5 steps for process costing.
Analyze inventory flow.
Convert in-process inventory to equivalent units.
Compute all applicable costs.
Calculate the cost per unit of finished and in-process inventory.
Allocate costs to units of finished and in-process inventory.
What are the types of process costing?
Types of process costing
Standard cost. Standard cost refers to calculating costs for production units instead of actual costs. ...
Weighted average. ...
First-in, first-out. ...
Analyze the inventory. ...
Convert inventory costs. ...
Calculate applicable costs. ...
Calculate the cost per unit. ...
Designate costs for complete and incomplete products.
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