This document discusses different types of costing methods including job costing, batch costing, process costing, and joint and by-product costing. It explains key features of each method such as how costs are collected and allocated for individual jobs or batches in job costing. The document also covers concepts in process costing including normal and abnormal losses as well as how joint products and by-products are treated.

1. Prepared by:
Dipesh Raj Pandey
Kathmandu University School of Management
(MBA)
Year - 2017

2. WHAT IS COSTING?

3. • Job Costing
• Batch Costing
• Process Costing
• Joint and By-Product Costing

4. Features:
1. It is a specific order costing.
2. The job is carried out or the product is produced to meet
the specific requirement of the order.
3. It is concerned with the cost of an individual job or batch
regardless of the time taken to produce it, but normally
short duration of time.
4. Cost are collected to each job at the end of it’s
completion.
5. The cost of job is ascertained by adding material, labor
and overheads.
6. Work in progress may or may not exist at the end of
accounting years.

5. Direct
Labors
Direct
Materials
Direct
Expenses
Factory
Overhead
Work-in -Progress
Add: Administrative, Selling And
distribution OH
Cost of
Sales
Add: Profit
Selling Price

6. • Cost per unit in batch = Total production cost of batch/No
of units in batch

7. • Continuous Operation Costing
• Features
• Average Cost Per Unit = Net costs of inputs/Expected
outputs

8. It is usual that certain amount of material introduced into
the production process are lost, scrapped or wasted. e.g.,
evaporation, breakages, spoilages for various reasons.
There are two types of process losses. They are:
1.Normal loss
2. Abnormal loss

9. Normal Loss:
Ex: Input 100kg
Output 95kg
______
Normal Loss 5kg
Abnormal Loss:
Ex: Input 100kg
Less: Normal loss 5kg
________
Expected output 95kg
Actual output 92kg
________
Abnormal Loss 3kg

10. Ex: Actual output 98kg
Expected output 95kg
_____
Abnormal gain 3kg

11. • Joint and by-products are complications that occur within
the context of process costing.

12. • Joint Products
Ex: Petrol and Kerosene

13. • By-Products
Ex: Sawdust and bark

15. THANK YOU