Process cost accounting

The process costing is a modeling method of the cost accounting. It is widely used to complement basic cost accounting systems. Activity-based costing is not a separate system, but it serves to better distribute overheads.

Definition / explanation

Process cost accounting is not an independent cost accounting system. Their main area of application is the Full cost accounting. Zusätzlich wäre die Prozesskostenrechnung auch auf Planned cost accounting or Contribution margin invoices applicable.

In recent years there has been an increase in Overhead recorded in many companies. These are among other things at a higher level Variety of products and a higher production planning effort due to more complex production methods. The main task of process costing is to correct the resulting deficiencies in the treatment of overheads.

Process costing steps

When creating process costing, the process is carried out in several steps and in a strictly structured process.

1. Process analysis

In the first step, the services required to meet individual overhead cost areas are determined. The results of this determination are also called cost centers.

Hierfür nutzt man zum Beispiel die sogenannte Gemeinkostenwertanalyse, einem Verfahren, das speziell zur Reduzierung von Overhead überwiegend bei Verwaltungsaufgaben entwickelt wurde.

The basis is also certain experience in many areas to be covered. In the process analysis, the overhead cost areas are basically divided into certain types of service and thus into individual processes.

2. Allocation of costs to the processes

After the individual processes have been subdivided, the costs they incur are assigned to them.

In principle, the following applies: the more cost pools are processed, the more difficult and complex the assignment is. This step is associated with a high level of work and recording effort.

3. Determination of the cost drivers

Cost drivers are the factors that determine the need for individual services for different types of processes. These have to be determined individually for all types of processes.

4. Determination of process costs

Here, the number of all processed orders and orders to be processed in the next year is determined for individual cost units, which is also known as the quantity. In this way, the costs per process unit of measure can be determined without having to put up with additional recording and planning costs.

However, there is disagreement as to whether, in this step, the costs that are not related to the output quantity must also be included in addition to the output quantity-neutral costs. These costs are the fixed costs that remain constant even if certain variables change over a certain period of time.

5. Process cost calculation

In the last step, the process costs are assigned to the individual products on the basis of the information obtained so far. To do this, you convert the Initial cost centers in final cost centers around. The number of process units of measure per product is determined and their individual costs are then allocated directly to the products.

The creation of process cost accounting is a complex, but nevertheless reliable method for improving the handling of overhead costs.


  • Process cost accounting is a modeling method of cost accounting
  • however, it serves to better distribute overhead costs
  • strictly structured process: process analysis, allocation of costs to the processes, determination of cost drivers, process cost determination and process cost calculation
  • reliable method for improving the treatment of overhead costs
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