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Chapter 9

Process costing

Outcome

By the end of this session you should be able to:

 Job and batch costing:

– describe the characteristics of job and batch costing

– describe the situation where the use of job or batch costing would be
appropriate

– prepare cost records and accounts in job and batch costing situations

– establish job and batch costs from given information

 Process costing:

– describe the characteristics of process costing

– describe situations where the use of process costing would be appropriate

– explain the concepts of normal and abnormal losses and abnormal gains

– calculate the cost per unit of process outputs

– prepare process accounts involving normal and abnormal losses and
abnormal gains

– calculate and explain the concept of equivalent units

– apportion process costs between work remaining in process and transfers
out of a process using the weighted average and FIFO method (Note:
situations involving work in progress (WIP) and losses in the same
process are excluded)

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