This document discusses different costing methods used in accounting. It outlines specific order costing methods like job, batch, and contract costing. It also discusses continuous operations costing methods like process costing which can be single output, operation, or operating costing. Process costing is preferred for mass production industries that have continuous operations and uniform standard products like textiles, chemicals, paper, sugar, oil, cement, mining, and paints & varnish.

1. Costing
Methods

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.