2. Costing Methods
• 1. Specific order Costing
Job Costing
Batch Costing
Contract Costing
• 2. Continuous Operations Costing
Process Costing
Single output / Unit costing
Operation costing
Operating costing/ service costing
3. Continuous operations costing
Used at places where
Mass production through continuous process
Goods sold from stock
Goods not produced to specific requirements of customers
Most important points:
Process involves production of identical units of output
Total costs are divided by number of units produced to know average cost per unit
4. Process Costing:
It is used by the type of industries where a production passes through different proceses,each
distinct and well defined. It is desired to know the cost of production at each process, so seprate
a/c is opened for each process.
Most preferred by: mass production industries engaged in continuous operation of uniform
standard product like
Textiles
Chemicals
Paper
Sugar
Oil
Cement
Mining
Paintns & Varnish
5. Single Output:
Single output or few grades. Like paper mails, flour mills, cement mills, Textiles
Operation costing:
Used in industries engaged in repetitive mass production. If manufacture of a product involves a
number of operations not processes, the cost is ascertained for each operation. Most suitable
for engineering industries, toy making etc.
Operating costing:
Suitable for industries which render service rather than manufacturing goods.
