DESCRIBE Unit Costing and Batch Costing. GIVE three examples of industries for each method where these are used. Also, EXPLAIN the costing procedure…

Unit costing is that method of costing where the output produced is identical and each unit of output requires identical cost. Under this method costs, are collected and analysed element wise and then total cost per unit is ascertained by dividing the total cost with the number of units produced. Such a method of costing is used in the industries like paper, cement, steel works, mining, breweries etc. Batch Costing: Batch Costing is a type of specific order costing where articles are manufactured in predetermined lots, known as batch. Cost per unit in a batch is ascertained by dividing the total cost of a batch by the number of units produced in that batch. Such a method of costing is used in the case of pharmaceutical or drug industries, readymade garment industries, industries, manufacturing electronic parts of T.V. radio sets etc. Costing Procedure in Batch Costing: To facilitate convenient cost determination, one number is allotted for each batch. Material cost for the batch is arrived at on the basis of material requisitions for the batch and labour cost is arrived at by multiplying the time spent on the batch by direct workers as ascertained from time cards or job tickets. Overheads are absorbed on some suitable basis like machine hours, direct labour hours etc.