Entity: PROCESS-COSTING
Process costing is a method used in cost accounting to assign manufacturing costs to units produced in a continuous process. It involves tracing and accumulating direct costs, as well as allocating indirect costs of a manufacturing process.
Process-Costing
Etymology
The term 'process costing' originates from the field of cost accounting, where it is used to describe a specific method of assigning manufacturing costs.
Definition
Process costing is a method used in cost accounting to describe one method for collecting and assigning manufacturing costs to the units produced. It involves tracing and accumulating direct costs, as well as allocating indirect costs of a manufacturing process.
Historical Context
Process costing has been used in various industries for many years to determine the cost of production and allocate costs to products efficiently.
Cultural Significance
Process costing plays a crucial role in cost accounting and helps companies determine the cost of production accurately, especially in mass production scenarios.
Related Concepts
- Job costing
- Activity-based costing
See Also
A method of assigning costs to production processes where products are produced continuously, with unit costs determined by averaging units produced to the total cost of the process.