Difficulties in Process Costing

These are the Difficulties in Process Costing
First difficulty is the determination of production quantities and their stage of completion presents problem.
Second difficulty is the materials cost computations frequently require careful analysis
Third difficulty is the discussion of lost units by shrinkage, spoilage, or evaporation indicates that the time when the loss occurs influences the final cost calculation.
Fourth difficulty is the Industries using process cost procedures are generally of the multiple product type.

Costing By Departments

Costing By Departments: The nature of manufacturing operations in firms using process or job order cost procedures is usually such that work on product takes place in several departments. With either procedure, departmentalization of materials, labor, and factory overhead costs facilitates application of responsibility