1. By:
Prakhar Bhargava (I058)

2.  In a batch: many identical items are
produced.
 Identification and Assignment of Cost related
to producing a set amount of Good.

3.  Includes: Fixed &VariableCost
 To find Unit Cost of Batch of Goods
Batch Cost
Number of Units Produced

4.  When Customers orders a quantity of
Identical Item.
or
 When company decides to manufacture
batch of identical parts

5.  Products accounted for Cost through Batch
Costing are:
 Medicine
 Footwear
 Radios /Television Sets
 Production of Engineering Components
 Clothing Manufacturer

6. EOQ involves two types of costs:
 Set up cost
 Carrying cost
The particular batch size for which set up cost and
carrying cost is minimum is called EBQ
EBQ= 2DS/C

7.  Reduces the initial capital outlay
 Batch production reduces per unit cost
 Mass and commercial production
 Reduction in time to produce single unit
 Labor cost is reduced
 Useful for smaller businesses

8.  Machine breakdown may stop whole production

9. Job Costing Batch Costing
Costs are collected and accumulated as per
jobs or contract
Lots of similar units which comprise batch is
used as a cost unit for finding cost
Each job is treated as separate entity for
calculating cost
Separate cost sheet is maintained for
separate batches assigning batch number
Cost are found at a completion stage of job Cost per unit is determined by dividing total
cost and by number of units in batch
The material and labor cost are complied
through abstracts and overheads are
charged on predetermined basis
Separate cost sheet is maintained for
separate batches assigning batch manner
Used in printing, furniture making Used in Drug industries, manufacturing
garments