Process Costing is a method of costing used mainly in manufacturing where units are continuously mass-prodcued through one or more processes. Examples of this include the manufacture of erasers, chemicals or processed food.
Or in our case, Beaver Drill-Saws!
Or in our case, Beaver Drill-Saws!
In Process Costing it is the process that is costed (unlike job costing where each job is costed separately). The method used is to take the total cost of the process and average it over the units of production.
Cost per Unit = Cost of inputs/ Expected output in units