Cost and Management
Batch and contract costing
Presented By: Affia McLeod, Theresa Hunter,
Yaneca McLaren and Stephanie Cummings
Cost- means the amount of expenditure incurred on a
Costing- means the process of ascertainment (collection)
Batch-is a quantity of goods produced at one time.
Batch Cost may be defined as a cost that is incurred when a group
of products or services are produced.
It cannot be identified to specific products or services within each
Batch Costing is the identification and assignment of those costs
incurred in completing the manufacture of a specified batch of
The batches of items made are usually placed in storage and sold in
Within each batch is a number of identical units but each batch will
Each batch is a separately identifiable cost unit which is given a
batch number in the same way that each job is given a job number.
Costs can then be identified against each batch number. For
example materials requisitions will be coded to a batch number to
ensure that the cost of materials used is charged to the correct batch.
Job Costing is a specific order cost system used for costing jobs
made to customer orders.
Batch costing is concerned with making a quantity of items,
whereas job costing focuses on a specific order from the customer.
Distinguish between Job Costing and Batch Costing
Contract costing is similar to job costing and is usually used for
work that are constructional in nature.
Duration exceeds one year
The work is site based
Constructional in nature
Characteristics of contract
Short term contracts are contracts that are commenced and
completed during the accounting period.
Long term contracts are contracts that extend over more than one
year accounting period.
Differentiate between long term and
short term contract
Main types of expenses