ECONOMICS

Detailed explanation-1: -In such a situation, process costing is used. Normally, finished product of one process is used as raw material for the next process and a final product is obtained in the last process. As the products are manufactured in a continuous process, this is also known as continuous costing.

Detailed explanation-2: -Definition of Process Costing (Job costing or job order costing is a system used to collect and assign manufacturing costs to units that vary from one another.)

Detailed explanation-3: -❑Process costing is a method of operation costing which is used to ascertain the. cost of production at each process, operation or stage of manufacture, where. processes are carried in having one or more of the following features: ❑Where the product of one process becomes the material of another process or. operation.

Detailed explanation-4: -There are three different kinds of process costing: weighted average costs, standard costs, and First-in First-out (FIFO). There is no Last-in, Last-out (LIFO) method of process costing, as the basic principle of process costing is that the first unit produced is the first unit used.

Detailed explanation-5: -Process costing is used in industries where the products are all basically the same, such as bricks or cement. Operational costing, on the other hand, is used in industries where the products are similar but may have some variation in terms parts or the quality of materials.