ECONOMICS

Detailed explanation-1: -Toy manufacturing industry should use batch costing. Batch costing is another form of job costing. Under this method, homogeneous products are taken as cost unit. A batch consists of a specific number of products or units or articles.

Detailed explanation-2: -Batch costing is generally applied in manufacturing industry making readymade garments, toy manufacturing industries, tyre and tubes manufacturing companies, pharmaceutical industry, etc.

Detailed explanation-3: -Process costing is used most often when manufacturing a product in batches. Each department or production process or batch process tracks its direct material and direct labor costs as well as the number of units in production.

Detailed explanation-4: -Batch cost is the cluster of costs incurred when a group of products or services are produced, and which cannot be identified to specific products or services within the group. For cost accounting purposes, it may be considered necessary to assign the batch cost to individual units within a batch.

Detailed explanation-5: -Batch costing is used when the manufacturing consists of repetitive production. Job costing is employed when jobs are executed for different customers according to their specifications. Each job is treated as a separate entity for the purpose of costing. Costs are collected and accumulated according to jobs.