Process costing

s
 PROUDCT = INPUT-OPENING WIP+CLOSING
 In weighted average cost method opening wIP is added
into material, labor, ohds cost.
Budgeting
 Sales budget
 Production budget is necessary to calculate material,
labor and ohd budget.
 Prod budget = sales volume + closing stock – opening
stock
 Material purchase budget= consumption+ closed –
opening
 High low method in semi average
Relevant costing
 Machine already bought is not relevant. Its dep, book
value value is not relevant. Its scrap relevant.
 Machine bought for a project etc, its everything iss
relevant
 Idle time is committed cost so not relevant
 Contribution cost is relevant
 Basic pay relevant
 Material already in use has replacement cost so
relevant
 Not in use has realizable COST