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Pick a REAL company (local or national) that you believe uses Process Costing. What costs would...

Pick a REAL company (local or national) that you believe uses Process Costing. What costs would that company track? Please provide specific examples.
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Answer #1

The company i have chosen is petroleum company with national presence. They buy Crude oil and process them into various output.

Costs tracked by the Company:

  • Raw Material costs like Crude oil
  • Packing Material for packing finished goods to sell in retail shelves
  • Material handling cost- storage and internal movements
  • Labor- Engaged in production and packing
  • Consumables- direct cost
  • Electricity
  • Logistics cost for transport of Finished Goods
  • Overheads

Overheads costs include:

  • Repairs and Maintenance
  • Plant and Machinery Depreciation
  • Employee Welfare
  • Travel Cost
  • Taxes
  • Rental costs
  • Contract labor cost
  • Management Salary
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