BCAS-8
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BANGLADESH COST ACCOUNTING STANDARDS
The Institute of Cost and Management Accountants of Bangladesh
ICMA Bangladesh, ICMA Bhaban, Nilkhet, Dhaka–1205 Bangladesh
BCAS 8
Process Costing
BCAS-8
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BCAS 8: Process Costing
Summary
Effective Date : ICMAB prepares this standard for ultimate use and adoption by every company operating
in Bangladesh at its own discretion starting from the period beginning on July 1, 2014.
Objective : The main purpose of this standard is to guide companies with the application of process
costing for costing of products. This is applicable to such companies that engage in mass
production of homogeneous products. Three methods of product costing, namely, first in
first out, weighted average and standard costing is illustrated in the appendix for
application. However, the choice of the methods is left at the discretion of the practitioner.
The concept of spoilage is also incorporated though the standard presents no indication of
incorporating the cost of spoilage in product cost for the sake of flexibility as part of the
practitioners.
Key Features :
Introducing process costing
Presenting the first in first out, weighted average and standard costing methods
Presenting normal and abnormal spoilage with its application
Identifying variances while applying standard costing system
Introducing a complete cost of production (COP) report
BCAS-8
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Contents
Particulars Paragraphs
Introduction
Scope 1-2
Objective 3
Definitions 4
Standards 5-13
Recording and Reporting 14-18
Appendix
BCAS-8
BCAS 8: Process Costing
The standards, which have been set in bold italic type, should be read in the context of the background
material and implementation guidelines of this standard. BCAS is not intended to apply to immaterial items.
Introduction
Manufacturing concerns devote their resourceful effort to ascertain their product cost using different costing
methods which sometimes becomes a dilemma for the cost manager, even entrepreneur. But the nature of
business and characteristics of products always play the required role for selecting the costing methods. There
are few harmonized costing methods have been practiced worldwide; among all, the process costing is one of
the pioneers in relation to the production process of the products where it is identified as mass production
process. A process method is characterized by a large number of homogeneous products passing through a
series of processes, where each process is responsible for one or more operations that bring a product one
step closer to completion.
Scope
1. This standard should be applied to manufacturing entity’s cost statement if it fulfills the following
conditions:
a) Products should be homogeneous
b) There should exist mass production
c) Products should pass through a series of processes consuming resources at a varying level
