Batch costing

                           

      In batch costing articles are produced in a lot i.e., one unit of product is not produced but a lot of say,500 /1000 units of such product is produced. This is a form of job costing. Under job costing, it is used as a cost unit, whereas under batch costing, a lot of similar units which comprise the batch may be used as a cost unit for ascertaining cost. In the case of batch costing separate cost sheets are maintained for each batch of products by assigning a batch number. Cost (P.U) in a batch is ascertained by dividing the total cost of a batch by no.of items produced in that batch. Such a method of costing is used in the case of drug industries, readymade garments, bakeries....etc.

Cost(P.U) = Total cost/ No.of items produced





                  

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