Process Costing is a method of Costing used in industries where the material has to pass
through two or more processes for being converted into a final product. It is defined as “a
method of Cost Accounting whereby costs are charged to processes or operations and
averaged over units produced”. Such type of costing method is useful in the manufacturing of
products like steel, soap, chemicals, rubber, vegetable oil, paints, varnish etc. where the
production process is continuous and the output of one process becomes the input of the
following process till completion.
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