Batch Costing

This is a kind of job costing that is utilized when production consists of limited repetitive work and definite number of item manufactured in one batch.  A batch is explained as a cost unit consisting of a group of identical item in specific sizes and colors of shoes, spare toys, parts. The net cost incurred in production is spread on the number of units made while the batch is finished.

Procedures:

1. Allocation of batch number
2. Production order is made
3. Creation of batch costs account
4. Completion of the work and closure of the batch cost account
5. Allocation of costs to individual units in the batch
6. Determination of selling price/batch and unit.