Process costing
(a) Describe the characteristics of process costing
(b) Describe situations where the use of process costing would be appropriate
(c) Calculate the cost per unit of process outputs
(d) Explain the concepts of 'normal and abnormal' losses and 'abnormal' gains
(e) Prepare process accounts, involving normal and abnormal losses and abnormal gains
(f) Calculate and explain the concept of equivalent units
(g) Apportion process costs between work remaining in process and transfers out of a process using the weighted average and FIFO methods
(h) Prepare process accounts in situations where work remains incomplete
(i) Prepare process accounts where losses and gains are identified at different stages of the process

The basics of process costing
Process costing is a costing method used where it is not possible to identify separate units of production, or jobs, usually because of the continuous nature of the production processes involved.
It is common to identify process costing with continuous production such as the following. • Oil refining • Foods and drinks • Paper • Chemicals

Process costing may also be associated with the continuous production of large volumes of low-cost items, such as cans or tins.

Features of process costing
(a) The output of one process becomes the input to the next until the finished product is made in the final process.

(b) The continuous nature of production in many processes means that there will usually be closing work in progress which must be valued. In process costing it is not possible to build up cost records of the cost per unit of output or the cost per unit of closing inventory because production in progress is an indistinguishable homogeneous mass.

(c) There is often a loss in process due to spoilage, wastage, evaporation and so on.

(d) Output from production may be a