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Solution

International paper is a global firm that provides packaging material, pulp and paper to the consumers under various brand names.

It\'s business is mainly dependent on using natural resources processing them and transforming them into useful products. For example the process of making paper includes cutting down a tree, extraction of the pulp from the tree, processing of the pulp and finally production of paper. This whole process can be divided into sub processes and hence process costing would be a very suitable method for the company to manage it\'s costs and profitability.

The individual processes can be held accountable for their respective costs, efficiency and profitability. Also if at any stage of production there comes a situation when purchasing a raw material from outside is more beneficial than procuring air processing it then a financially sound decision can be taken. This is possible only with the process costing technique.

Also releasing bonus to the managers and their teams of a particular process based on their individual efficiency and profitability gives an appropriate incentive for them to increase efficiency and lower the costs.

Process costing also helps the management to properly assess the costs being incurred at each and every stage of the production process. Any inefficiency can be easily identified and taken care of.

Hence process costing technique would be quite beneficial to the company in this case.