Businesses or industries are different from each other according to their nature of operation and characteristics of finished of finished products produced or service rendered by the. It is evident that the job of building a house is quite different from running a motor vehicle for a kilometer.
Methods of costing for ascertainment of actual cost may be identified in many names according to the variation of the variation of procedure adopted to determine cost for different types of product. Broadly there are two group of costing methods:
(a) Specific order
(b) Operation costing.
(a) Specific order:
Specific order or job costing is applicable for specific jobs, batches or contracts each of which is undertaken by specific order or contract job costing.
(b) Operation costing or process costing is applicable for standardized products produced or service rendered continuously in a repetitive manner. In this method, costs are first charged to the operation and then averaged over units produced or service rendered during the period.
Methods of costing for ascertainment of actual cost may be identified in many names according to the variation of the variation of procedure adopted to determine cost for different types of product. Broadly there are two group of costing methods:
(a) Specific order
(b) Operation costing.
(a) Specific order:
Specific order or job costing is applicable for specific jobs, batches or contracts each of which is undertaken by specific order or contract job costing.
(b) Operation costing or process costing is applicable for standardized products produced or service rendered continuously in a repetitive manner. In this method, costs are first charged to the operation and then averaged over units produced or service rendered during the period.
No comments:
Post a Comment