PROCESS

COSTING AND
THEIR VARIANTS
By Reymond Dy and Kaizen Joy Cariaga
 • is a system used when there is a large
What is production of comparable products and the
Process costs associated with individual units of
output cannot be distinguished from one
Costing? another.
 Types of Process Costing

1. Weighted
2. Standard Cost
Average Cost

3. Fist in, First out

(FIFO)
 • Helps corporations and
production managers track
The product costs in industries that
generate huge quantities of
Importance of goods
Using a • Experience price changes owing
to processes and many
Process production lines.
Costing
Using the Process Cost Method

1. Analyze the 2. Convert

Inventory Inventory Costs

3. Calculate 4. Calculate The

Applicable Costs. Cost Per unit.

5. Cost of Full and

Partial Items
QUESTION • Give at least one type of
#1 process costing?
When Is a
Process • Suitable for businesses that make products
Costing in batches.
System • Identical
• Estimate input and output losses faster.
Suitable?
Characteristics of Process Costing

2. Output is the
1.Predetermined
Input of subsequent
Series
process

4. Cost are charged

3. Homogeneous
to the process

5. Joint and By-

6. Losses
Products
 Process Costing: Pros and Cons

PROS CONS
• Ease of use • Errors
• Flexibility • Calculation
• Standardized difficulties
• Time-
Consuming
What is the
significance • To monitor product prices in sectors dealing
of process with large quantities of manufactured items
that are prone to frequent price variations.
costing?
What is
process • This is sometimes referred to as
“continuous costing” because the products
costing also are made using a continuous process.
known as?
QUESTION • Process Costing is also known as?
#2
 References:
https://businessyield.com/accounting/
process-costing/