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Job and Batch Costing

This document contains a student's responses to questions about job costing and batch costing. [1] Job costing tracks costs for individual jobs or orders, while batch costing tracks costs for batches of identical items. [2] Key characteristics of job costing include specializing in single products for specific customers within a short time duration. [3] Key characteristics of batch costing include manufacturing batches of identical items to replenish stock, with the cost per unit determined by dividing total batch costs by the number of items produced.

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Abu bakar Junid
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116 views2 pages

Job and Batch Costing

This document contains a student's responses to questions about job costing and batch costing. [1] Job costing tracks costs for individual jobs or orders, while batch costing tracks costs for batches of identical items. [2] Key characteristics of job costing include specializing in single products for specific customers within a short time duration. [3] Key characteristics of batch costing include manufacturing batches of identical items to replenish stock, with the cost per unit determined by dividing total batch costs by the number of items produced.

Uploaded by

Abu bakar Junid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Name: Abu Bakar Bin Junid

Student ID: 2019744435

Salam Dear ALL students AAMP5A,

Please answer the following questions:

1. Define the terms of JOB COSTING and BATCH COSTING.

Job costing is a specific order costing in which costs are attributed to individual jobs.
According to Chartered Institute of Management Accountants (CIMA) defines job costing is that form
of specific order costing under which each job is treated as a cost unit and costs are accumulated
and ascertained separately for each job. A job may consist of a job, product, batch of products,
contracts, a service or any other specific order. Job costing is a costing method applied to determine
the cost of specific jobs or lots of production which manufactured according to customers’
specification such as making furniture, job printing, general engineering and others. Each job is
treated as a separate entity for the purpose of costing. The material and labour costs are compiled
through the respective abstracts and overheads are charged on predetermined basis to arrive at the
total cost.

Batch costing is where the identical items of products being manufactured as a batch. CIMA
defines batch costing as, that form of specific order costing which applies where similar articles are
manufactured in batches either for sale or for use within the undertaking. Batch costing is another
form of job costing. Under this method, homogeneous products are taken as cost unit. A batch
consists of a specific number of products or units or articles. The number are varies from one batch
to another. Hence, batch cost is used to determine the cost per unit or article per unit. Procedures
for costing batches are similar to costing jobs. The batch would be treated as a job during
manufacture and the costs collected as previously illustrated in job costing. The principles used in
costing a batch is the same as the principles used in job costing, such as each batch is given a batch
order number, material used allocated to each number, labour cost for each batch determined and
the overhead absorbed. Once the batch production is completed, the cost per unit can be calculated
by dividing the total batch cost by the number of good units produced.
2. List down FIVE characteristics of JOB COSTING.

i. Specialize in making single products.


ii. Small market where the product is normally not for the mass market.
iii. Job normally completed within short time duration.
iv. According to customers’ special request
v. Completed in a factory or workshop.

3. List down THREE characteristics of BATCH COSTING.

i. Internal manufacturing order is raised for a batch of identical parts, sub-assemblies or


products to replenish stocks.
ii. Customer orders a quantity of identical item/homogeneous.
iii. Cost per unit is determined using formula:

Total Costs
Cost per unit/item =
No. of items produced

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