Like for like and Process costing: Difference between pages

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(LFL).
Process costing (rather than job costing) is used when production is of homogenous items and is organised on a continuous or flow-line basis.


'Like for like' is a basis of comparison - usually of revenues - which seeks to exclude the effects of growth by acquisition or of any disposals.
Under process costing, costs are accumulated for each separate process or operation for a period of time, and then averaged by dividing the total cumulative costs for the period by a measure of the output (for the same period).


The like for like comparison only takes account of activities which were in existence during both of the periods being compared.
== See also ==
 
* [[Job costing]]
 
Like for like comparisons should be treated with care, as the selection and presentation of relevant activities for comparison may involve a degree of subjectivity on the part of the management whose performance is being reported on.
 
Management may - consciously or unconsciously - be influenced to present figures in a way that reflect well on its own performance.


== See also ==
* [[Profit]]
* [[Revenue]]
* [[Sales]]
* [[Turnover]]
* [[Underlying]]

Revision as of 14:20, 23 October 2012

Process costing (rather than job costing) is used when production is of homogenous items and is organised on a continuous or flow-line basis.

Under process costing, costs are accumulated for each separate process or operation for a period of time, and then averaged by dividing the total cumulative costs for the period by a measure of the output (for the same period).

See also


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