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Chapter 9

Batch costing

Batch costing is also a form of specific order costing. It is suitable for a business that
produces batches of identical units, but each batch is for different units.

For example, a clothing manufacturer may have a production run for a batch of men’s
white shirts of collar size 16 inches. It may then have a production run for a batch of
men’s trousers with a waist size of 34 inches.

Each batch of production will have different costs but each unit within the batch
should have the same cost. Therefore the total cost of the batch of production is
calculated and divided by the number of units in that batch to find the cost per unit for
that batch of production.

Illustrations and further practice

Now try TYU question 2 from Chapter 9

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