Cost Accounting Essay Example | Topics and Well Written Essays - 2000 words

Cost Accounting - Essay Example The stainless steel is manufactured in five main processes. These processes are melting, hot rolling, annealing and pickling, cold rolling and finishing. All the processes are done in different departments. The process of steel manufacturing starts with melting in the melt shop. In this department the scrap is melted. The scrap acts as the raw material of the stainless steel. Once the scrap is melted in the melting the output is transferred to the hot rolling mill for further processing. In this rolling department the meted scrap is rolled two meter wide. Once the hot rolling department is done with its work then the output is transferred to the annealing and pickling department for further processing. In this department fine coil of thickness varying from 1.2 mm to 13 mm is produced. The mechanical properties of the stainless steel are regained in this process. Some of these coils are sold to the industries the remaining ones are transferred to the fourth process of cold rolling. He nce the cost is allocated after considering the products which is sold to the industries. In cold rolling and annealing department the thickness of the coil is again reduced to 0.3mm in order to meet up the customers’ needs. In this process the coil is rolled into a flat surface to give the stainless steel flatness. Once this is done the output from this department is transferred to the metal finishing department. In this department the flat stainless steel is cut into different shapes and sizes which will be ultimately sold to the market (ArcelorMittal-c, n.d). As the manufacturing is done in a series of processes therefore the costing of the outputs must be done as per the process costing. While manufacturing any product many costs are incurred. Some of these costs can be identified form the products and some cannot. The costs which can be traced form the product are directly