In sugar manufacturing, sugarcane is processed through multiple continuous stages — crushing, clarification, evaporation, crystallisation, and centrifugation — to yield sugar along with by-products like molasses and bagasse. Which costing method is MOST appropriate for a sugar manufacturing unit?

Process Costing is used in industries where production is continuous, homogeneous, and passes through a series of distinct stages, with the output of one process becoming the input of the next. Sugar manufacturing is a classic example: sugarcane passes sequentially through crushing, clarification, evaporation, crystallisation, and centrifugation. Costs are accumulated process-wise, and by-products like molasses and bagasse are credited at their net realisable value. Job costing suits unique discrete orders; batch costing applies to identical items produced in batches; contract costing applies to large long-term projects. The continuous, mass-production nature of sugar manufacturing makes Process Costing the correct choice.