AA MA Management Accounting

BATCH COSTING – EXPLAINED

BATCH COSTING
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BATCH COSTING

Batch costing is similar to job order costing ,the only difference is that costing focus moves from job orders to batches. It is practiced in industries producing similar components in form of batches e.g footwear industry ,so it is easy to account for whole batch of similar footwear collectively. Batch cost is calculated by dividing total batch cost by number to units in batch

Cost per unit = total cost of batch / number of units in batch

Like job order costing batch costing is done in similar way i.ecost plus pricing techniques .Total cost each batch is determined and then selling price is decided by adding certain % of profit to it