Production loss's evaluation in the process costing and an application

Ill ABSTRACT Companies that are established to satisfy society's needs have to struggle in competition circumstances. Changing of the market shares continually in globalizing world has increased the importance of the companies' profit rate in competitive market. Under these circumstances, companies have to alter their traditional management methods into methods which profit, quality and cost are important elements. Today's companies, produce products to satisfy the customers' needs, activities under competitive circumstances, through eliminating the non value-added and decreasing the costs to minimum level. In this way profit reaches the maximum level. Total quality approach provides re-organization of companies and tries to abolish the unnecessarily which factors increases the costs. However, companies have to accept some production loss. Companies have to determine the production loss which is normal or abnormal and recycle of the production loss into production process. Thus, production loss decreases and profits may be increased.