Application of Process Costing Methods in Industries: Different companies will adopt different cost accumulation procedures. Cost accumulation procedures applied by manufacturing industries are classified as either (1) job order cost system or procedures or (2) process costing system or procedures. It is essential to realize that, excluding some alterations, the accumulation of materials costs, labor costs and factory overhead also applies to process costing.
In fact, the Application of Process Costing Methods are mostly found in Industries adopting continuous process. Process costing methods are applied for manufacturing concerns which are producing chemicals, lubricants, garments, steel, rubber, cement, flour, pharmaceuticals, shoes, plastics, sugar, or coal. This sort of costing is also applied by companies manufacturing items such as rivets, screws, bolts, and small electrical wares.
Another type of manufacturing concerns applying process costing system is the assembly-type concerns which manufacture such things as type-writers, automobiles, aero planes, and household appliances (washing machines, fridge, toasters, electric irons, radios, television etc.). Finally, certain service industries such as gas, water, and heat cost their products by applying process costing systems. Application of Process Costing Methods are widely accepted.
 Thus, the process costing procedure is applied when goods are manufactured under circumstances of continuous processing or under continuous mass production environment. In fact, process costing systems are frequently termed “continuous or mass production” cost accounting systems.
 The type of manufacturing process performed establishes the type of costing system that must be applied. For example, company manufacturing customized equipment will adopt a job order cost procedure, whereas a chemical company will adopt a process cost procedure. In the case of the equipment manufacturer, a job order cost sheet is made out for each job or order to accumulate the cost of materials, labor and factory overhead. It is important to understand that, excluding some alterations, the accumulation of materials costs, labor costs and manufacturing overhead also applies to process costing. Application of Process Costing Methods are increasing day by day.
