1. Process Costing
The costing method applicable where goods result from a sequence of continuous or repetitive operations or process.
Costs are arranged over the units produced during the period.
To determined the cost of product at each operation, process or stage of manufacture.
e.g. of industries paint, textiles, steel, mining oil refineries, dairy products etc.

2. Process Costing Materials:
The raw material is taken at the cost value for each process. The output of previous process becomes the input of next process.
Wages:
The wages on each process are traced clearly and allocated to that process.
If the workers are employed on various processes, the amount of wages is apportioned on the basis of number of hours spent on those processes.

3. Process Costing Direct expenses:
The direct expenses of each process are traced clearly and allocated to that process.
Indirect expenses:
All indirect material, indirect labour, and indirect factory expenses are allocated to each process on appropriate basis or at predetermined rates.

4. Normal Loss Caused under normal circumstances and inevitable loss.
Can not be avoided by any steps or measures. E.g. loss due to evaporation, shrinkage etc.
Calculated as certain % of input in the respective process.
% of normal loss is determined on the basis of scientific study of the manufacturing process, industry trends, and nature of raw material.
It may have scrap value.

5. Abnormal Loss & Abnormal Gain
Caused under abnormal circumstances.
It is avoidable and controllable by management by establishing proper precautionary measures.
E.g. accidents & negligence, bad designing, poor materials etc.
Abnormal gain arises when the actual loss is less than the normal loss expected.
Caused due to rise in the efficiency of production department.

6. Accounting for Joint Products
E.g. spirit, kerosene, fuel oil, lubricant oil, wax etc in the process of crude petroleum
On the basis of relative Sales Values 
On the basis of Selling Price 
On the basis of Sales Value 
On the basis of sales Value less cost of completion of individual product.
On the basis of Quantities produced of individual product
Contribution margin method = Cost are divided into two categories (i.e.) variable and fixed.
Variable costs are separated on unit produced. Fixed on the basis of contribution ratios made by different products.

7. Accounting For By Product
E.g tar while processing the crude oil.
Sale of By Product as other income
Sale of By Product as a reduction in the cost of joint product.
Treating By products having no cost at the time of separation but charging them with all cost after separation.
Recording Cost of By Products.
Market Value method – by an estimated market value of by product prevailing in market at the time of its sales.