Batch costing involves calculating the total cost of producing a batch of units, such as tablets, which includes the costs of raw materials, labor, direct expenses, and overheads. The economic batch quantity is the optimum batch size, as producing units in batches of this size will result in the minimum total cost of production. The formula for calculating the economic batch quantity takes into account the annual units demanded, setup cost per batch, and carrying cost per unit.

1. W W W . S V T U I T I O N . O R G
Batch Costing Presentation

2. Batch
 Batch is group of units.
 For example, batch of tablets.

3. Batch Costing
 Total cost of producing each batch
 For Example for making one batch of tables you have
to collect the cost of its raw material, labor cost and
other overheads.
Material
+
Wages
+
Direct Expenses
+
Overheads

4. Economic Batch Quantity
EBQ is Optimum batch size. If we will produce
units in that batch, our total cost of production
of batches will be minimum.
Formula of EBQ
U = Annual Units Demanded
S = Setting Up Cost per batch
C = Carrying Cost Per unit