ECONOMICS

Detailed explanation-1: -Batch costing is the last method of costing under specific order costing. It is used in a group of the same or similar products which are made and passed through a factor at a specified time and number. Every batch is a unit and their cost is fixed separately.

Detailed explanation-2: -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-3: -job costing method is used. For assigning indirect costs (overheads) models such as Activity Based Costing may be used. 2. Process costing method: In process costing system the cost of a service is obtained by assigning costs to masses of similar unit and then computing unit cost on an average basis.

Detailed explanation-4: -(a) Process Costing: It is adopted in industries where the products pass through different processes or stages before completion. Under this method, the cost of a product at each process is ascertained. This method is adopted by automobile industries, Soap factories, chemical works, oil refineries, Sugar mills etc.

Detailed explanation-5: -The batch costing method is also known as lot costing because products are produced in lots of, for example, 500, 1, 000, or any other number. Batch costing is commonly used in the pharmaceutical industry.