Batch Costing

4326 Words Nov 6th, 2008 18 Pages
REVIEW OF THE LITERATURE
BATCH COSTING

INTRODUCTION

Historically, because of the industrial background of cost accounting, specific order costing has tended to centre around the manufacturing environment. Given the developments both in cost accounting and performance evaluation over the last 20 years or so, cost accounting is now being applied in manufacturing, non manufacturing , service and even in non profit making organizations.

Cost Accounting is usually considered only as it applies to manufacturing operations. In today’s economy, however every type and size of organization should benefit form the use of cost accounting concepts and techniques. For example financial institutions, governmental agencies and NGO’s may apply cost
…show more content…
Cost is someway-different form the expense. Job order costing is almost opposite from process costing. In cost accounting accountant records every transaction of the process.

JOB ORDER COSTING:

In specific order costing the cost of each order produced for a given customer or the cost of each lot to be placed in stock is recorded on a specific order sheet. The cost sheets are subsidiary records, which are controlled by the work in process account. In specific or job order costing system, product is made according to the orders and there is separate and quick record of every transaction. Specific order costing is some way expensive than the process costing. In job order costing every product is made according to the instructions of the clients.

Cost Accounting Information System:
To manage and enterprise, systematic a comparative cost information as well as analytical cost and profit data are needed. This information helps management set the company’s profit goals, establish departmental targets which direct middle and operating management towards the achievement of the final goal. The information system should provide the proper focus for management attention. Certain significant aspects of performance may be difficult to measure.
Requirements for record keeping and reporting may be imposed on an organization by external forces, such as the internal revenue code, the federal insurance contributions act, the Securities and Exchange Commission, and labor unions.

More about Batch Costing

Open Document