Process costing is an accounting technique typically used by companies that produce identical or very similar commodities or output units in large quantities.
A manufacturing process's direct expenses are tracked, tallied, and distributed using a methodology called process costing. A month's worth of manufacturing may be included when assigning costs to products, which typically happens in large batches. Costs must eventually be divided across the many product units. It is the antithesis of job costing, which seeks to quantify the specific costs of producing each unit, in that it gives average costs to each unit. Typically, the chapter on process costs is important. It is a technique used to allocate expenses to manufacturing units in businesses that produce massive amounts of uniform goods. Process costing is a sort of operation costing that is employed to determine the cost of a product at each process or step of manufacture.
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