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Definition

Process cost system

Process cost system is a system of accounting used when a large quantity of similar products are manufactured. Production is continuous to ensure that adequate inventories of the finished product are on hand.

Process costing accumulates product-related costs for a period of time (such as a week or a month) instead of assigning costs to specific products or job orders. In process costing, companies assign the costs to departments or processes for a set period of time.

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