Basic features
Industries, where process costing can be applied, have normally one or more of the following features:
1. Each plant or factory is divided into a number of processes, cost centres or departments, and each such division is a stage of production or a process.
2. Manufacturing activity is carried on continuously by means of one or more process run sequentially, selectively or simultaneously.
3. The output of one process becomes the input of another process.
4. The end product usually is of like units not distinguishable from one another.
5. It is not possible to trace the identity of any particular lot of output to any lot of input materials. For example, in the sugar industry, it is impossible to trace any lot of sugar bags to a particular lot of sugarcane fed or vice versa.
6. Production of a product may give rise to Joint and/or By-Products.
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