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7. Process Cost Analysis

7.1 Understanding process industry

Some industries like oil refineries, sugar mills, milk products industry, run several sequential processes to get the final output. Input is put in the first process; output of the first process is transferred as input of the second process. This continues until the final product comes out of the end process. See the process diagram given in figure 7.1. Input is put in process-I. It comes out as final product in process-III. Process-II receives the output of process-I and process-III receives the output of process-II. Of course, it is possible to sell the output of process-I or process-II, if the market for such intermediate products exists.

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