Page 180 - BA2 Integrated Workbook STUDENT 2018
P. 180
Chapter 10
One main feature of a job costing system is the use of a job cost sheet or job card
which is a detailed record used to collect the costs of each job. Each job would be
given a specific job number which identifies it from all other jobs. Costs would be
allocated to this number as they are incurred on behalf of the job. Since the sales
value of each job can also be separately identified, it is then possible to determine
the profit or loss on each job.
1.3 Batch costing
The CIMA Terminology defines a batch as a ‘group of similar units
which maintains its identity throughout one or more stages of
production and is treated as a cost unit’. An example would be a
batch of printed leaflets.
Batch costing is very similar in nature to job costing. It is a separately identifiable cost
unit for which it is possible to collect and monitor the costs. The only difference is that
a number of items are being costed together as a single unit, instead of a single item
or service.
Once the cost of the batch has been determined, the cost per item within the batch
can be calculated by dividing the total cost by the number of items produced.
Job and batch costing are specific order costing methods. These methods are
appropriate for organisations which produce cost units which are separately
identifiable from one another.
Illustrations and further practice
Talk through illustrations 1 and 2 for job costing
Try TYU 1 and 2 for job costing
Try TYU 3 for batch costing
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