Cost and Management accounting on Batch and Job costing

1. Cost and Management
Accounting
Batch and contract costing
Presented By: Affia McLeod, Theresa Hunter,
Yaneca McLaren and Stephanie Cummings

2.  Cost- means the amount of expenditure incurred on a
particular thing.
 Costing- means the process of ascertainment (collection)
of costs.
 Batch-is a quantity of goods produced at one time.
Key terms

3.  Batch Cost may be defined as a cost that is incurred when a group
of products or services are produced.
 It cannot be identified to specific products or services within each
group
Batch cost

4.  Batch Costing is the identification and assignment of those costs
incurred in completing the manufacture of a specified batch of
components.
 The batches of items made are usually placed in storage and sold in
the future.
 Within each batch is a number of identical units but each batch will
be different.
Batch costing

5.  Each batch is a separately identifiable cost unit which is given a
batch number in the same way that each job is given a job number.
 Costs can then be identified against each batch number. For
example materials requisitions will be coded to a batch number to
ensure that the cost of materials used is charged to the correct batch.
continuation

6.  Job Costing is a specific order cost system used for costing jobs
made to customer orders.
Job costing

7.  Batch costing is concerned with making a quantity of items,
whereas job costing focuses on a specific order from the customer.
Distinguish between Job Costing and Batch Costing

8.  Contract costing is similar to job costing and is usually used for
work that are constructional in nature.
Contract costing

9.  Duration exceeds one year
 The work is site based
 Constructional in nature
Characteristics of contract

10.  Short term contracts are contracts that are commenced and
completed during the accounting period.
 Long term contracts are contracts that extend over more than one
year accounting period.
Differentiate between long term and
short term contract

11.  Materials
 Labour plant
 Direct materials
Main types of expenses

12.  http://www.svtuition.org/2010/10/contract-
costing.html
 http://dosen.narotama.ac.id/wp-
content/uploads/2013/02/Chapter-20-Job-Batch-and-
Process-Costing.pdf
References