Costing Method: The “Fakruddin Restaurant” production follows the

“Process Method” in costing method because process costing is a special

“BRANCH” of costing used by the manufacturing industry. They are involved in
converting the RAW MATERIALS into the finished goods. In Fakruddin Restaurant,
they produced their whole branch’s product in the industry. On the other hand
this work of conversation is done step by step, each step is known “A Process”.
They used to calculate cost per unit of product is ascertained at each stage of
production and determine the manufacturing cost of product to calculate average
cost per unit. So now we can say that they are following process costing method.

Cost of the Product:

Direct Materials (DM): In a product, which materials are directly

involved with the product that is called “Direct Materials”.

In tehari, all the ingredients per day cost are $3360 and monthly cost is $100800.

Direct Labor (DL): In a product, which labors are directly involved with the
product that is called “Direct Labor”.
In tehari, the chef is the direct labor. His per day income is $833 and monthly
income is $25000.