Job order and batch costing assignment help

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Job order and batch costing includes various principles like regulating and controlling cost, evaluating and ascertaining cost to every production unit and outlining the profitability. Today the life of a student is much more demanding and tough because of the level of competition. There are lot of subjects a student has to take care of. This is why we’ve come up with our online service for job order and batch costing assignment help.

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Job Order and batch costing

Job order costing: It is basically used by companies who manufacture a number of different products. Manufacturing as well as service industries widely used costing system for their business to understand cost incurred for each individual job because each job uses different product and therefore there is different cost associated with each job or product.
Job order costing is used worldwide by the companies. Examples of business using this system are clothing factories, food companies, accounting firms, law firms etc. Three basic elements of job order costing are direct material, direct labour and factory overhead. These elements are accumulated as per the assigned job numbers. Per unit cost of a particular job is calculated by dividing the total cost allocated to the job by the number of units in that job. Per unit cost formula is:

  • Per unit cost= total cost applicable/ number of units

A cost sheet is used by the management to summarize the applicable job costs. Selling expenses and administrative expenses based on a percentage of manufacturing expenditure are recorded on the cost sheet to arrive at total cost.
Batch costing: Batch costing is a modified version of job costing. The term batch refers to a ‘lot’ in which products or articles are to be manufactured. When a particular product is manufactured, one unit is not produced rather a lot of say 500 or 1000 units of that particular product is produced. Hence batch costing is also termed as ‘lot costing’. This process of costing is used in drug industries, garment factories, manufacturing component parts of watches, televisions, auto parts etc.
The costing process of batch costing is similar as job costing except that here a batch becomes the cost unit instead of a job. Separate cost sheets are prepared for each batch of products manufactured by the company and each batch is assigned a number. Cost per unit is calculated by dividing the total cost of a batch by the number of items produced in that batch. Material, direct labour and overhead are assigned batch wise.

Types of cost involved in batch costing

Set up cost and carrying costs are the type of cost involved in batch costing. With the increase in batch size the set up cost per unit will decrease and the carrying cost will increase and vice versa.
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