Job Costing and

UNIT 12 JOB COSTING AND BATCH Batch Costing

COSTING
Structure

12.0 Objectives
12.1 Introduction
12.2 Job Costing
12.2.1 Features of Job Costing
12.2.2 Application of Job Costing
12.2.3 Advantages of Job Costing
12.2.4 Limitations of Job Costing
12.2.5 Documents Used in Job Costing
12.2.6 Procedure Involved in Job Costing
12.2.7 Cost Allocation for Different Activities

12.3 Batch Costing

12.3.1 Features of Batch Costing
12.3.2 Applications of Batch Costing
12.3.3 Process of Batch Costing
12.3.4 Differences between Job Costing and Batch Costing

12.4 Economic Batch Quantity (EBQ)

12.5 Let Us Sum Up
12.6 Keywords
12.7 Suggested Readings/ References
12.8 Answers to Check Your Progress Exercises

12.0 OBJECTIVES
After studying this unit, you should be able to:

 comprehend the meaning, features, advantages, limitations,

documents, procedures and applications involved in job costing;

 explain the meaning, features, applications and procedures involved

in batch costing;

 distinguish between job and batch costing; and

 calculate Economic Batch Quantity (EBQ).

12.1 INTRODUCTION
Dear Learners,
263
Methods of Cost You have already learnt the elements of cost and how to compute the cost of
Accounting
a product through cost sheets in general and agriculture in preceding units. In
this unit, we will discuss two prominent methods of costing i.e. job and batch
costing techniques to ascertain the cost of a product.

12.2 JOB COSTING

According to the terminology of CIMA London, Job Costing is “the basic
costing method applicable where work consists of separate contracts, jobs or
batches, each of which is authorized by a specific order or contract.” i.e. Job
costing is a costing method used to determine the cost of specific jobs, which
are performed according to the customer’s specifications. It is a basic costing
method that is applicable where work consists of separate projects or contract
jobs.

A job is simply a product or service that can be easily (in other words, at a
reasonable cost) distinguished from other products or services and for which
the firm desires that a specific cost be recorded for the product or service.
Firms that produce jobs are often called job shops. The record of the cost of
the job kept in the accounting system is called a job cost sheet or job cost
card. It is an accounting system that traces costs to individual units or specific
jobs, contracts, or batches of goods.

12.2.1 Features of Job Costing

 Using job costing, the cost of each job is ascertained separately. This,
in turn, helps in finding out the profit or loss of each job.
 It enables management to detect those jobs that are more profitable
and unprofitable.
 Job costing provides the base for determining the cost of similar jobs
to be undertaken in future as a part of future planning.
 Helps in managing and controlling costs, by comparing the actual
costs with the estimated cost. In short, the calculation of variances.

12.2.2 Applications of Job Costing

Generally, the application of the job costing method is followed in industries
such as printing press, automobile garages, repair workshops, shipbuilding,
foundry and other similar manufacturing units, which manufacture according
to customer’s specific requirements. A business that applies the costing
method usually has the following characteristics:
 Production is carried out based on the customer's specifications
 Products are manufactured in distinguishable lots
 Products produced are not of a uniform nature
 It is practical to maintain a separate record of each lot from the time
264 production is begun until it is completed.
12.2.3 Advantages of Job Costing Job Costing and
Batch Costing
The advantages of Job Costing are mentioned below:
 Profitability for each job can be individually determined
 Provides a detailed cost analysis of materials, labour and overheads
for each job as and when required
 The efficiency of the plant can be controlled by confining attention to
costs relating to individual jobs.
 Helps in the preparation of estimates
 Comparison of actual cost with estimated cost and calculation of
variances
 Helps in identifying unprofitable jobs
 Helps in providing a precise quotation for a product

12.2.4 Limitations of Job Costing

The limitations of Job Costing are listed below:
 Job costing is comparatively expensive to operate.
 With the increase in clerical processes, the chances of errors are
enhanced.
 The costs as ascertained, even where they are compiled very
promptly, are historical as they are compiled after the incidence.
 The cost compiled under the job costing system represents the cost
incurred under actual conditions of operation. The system does not
have any scientific basis.

12.2.5 Documents Used in Job Costing

 Manufacturing or Production Order: This document authorizes the
manufacturing or production department to produce a specified
quantity of a product that constitutes the job.

 Job Cost Card (Cost sheet): In job costing, a cost sheet is often used
to record all the direct and indirect costs incurred in stages of
production for the completion of each job. The job cost sheet shows
the direct material costs, direct wages, and overheads applicable to
respective jobs. The job cost card must be designed to suit the needs
of the organization.

 Other documents: The other documents such as material requisition

slips, tools and spares order, time tickets, inspection order etc., are
used by the dispatching department as a control mechanism to carry
out the dispatching functions.
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Methods of Cost 12.2.6 Procedure Involved in Job Costing
Accounting
Job costing involves the following steps (Figure 12.1):

Step 1: Receiving and Analysis of Enquiry: When an enquiry is received

from a customer, expected estimated costs are calculated in an estimate form.
The price is quoted for the particular job. If the job is accepted, a production
order is prepared along with all specifications and instructions.

Step 2: Tracing the related costs: When the job is commenced, you will
trace the costs involved in the job:
(a) Direct Material Cost: Material used during the production process of
a job and identified with the job is the direct material.
(b) Direct Labour Cost: This cost is also identifiable with a particular
job and can be worked out with the help of ‘Job Time Tickets’ which
is a record of time spent by a worker on a particular job.
(c) Direct Expenses: Direct expenses are chargeable directly to the
concerned job.
(d) Manufacturing Overheads: It is determined according to the
arrangement applied to the job.
(e) Selling and distribution overhead: It is applicable according to the
original plan.

Figure 12.1: Procedure for Job Costing

Step 3: Completion of Jobs: Postings of direct material, direct labour, direct

expenses and manufacturing overhead costs to the cost sheet for a job or
production order are made periodically throughout the run of the job or order.
On the completion of a particular job, the total cost relating to the job as per
266 the job cost sheet is transferred to the finished stock account.
Step 4: Preparation of Job Cost Card / Sheet: In order to ascertain the cost Job Costing and
Batch Costing
of a particular job, it is necessary to record all the expenditures related to a
job separately. For this purpose, a job cost card/sheet is used. A job cost card
is a cost sheet, where the quantity of materials issued, hours spent by
different classes of employees, amount of other expenses and share of
overheads are recorded. This is helpful in knowing the total cost, profitability
etc. of a job.

12.2.7 Cost allocation for different Activities

Cost allocation for different activities and its procedure can be understood
with the help of the table below:

Table 12.1: Allocation of various costs to activities with related

Procedures

Activity Procedure Allocation

Materials Stage 1: Procuring and Spoilage or scrap - Charged to overhead cost
storing in the warehouse pool for allocation at a later stage
Stage 2: Picking up Abnormal loss (if any) - Charged directly to the
from the store and cost of goods sold.
issuing to a specific job. On completion of the job order, the cost of the
entire job is shifted from work-in-progress
inventory to finished goods inventory.
On the sale of goods, the cost of the asset is
removed from the inventory account and shifted
to the cost of goods sold account when you
record the sale transaction
Labour Employee’s time is Direct labour - Charged directly to individual
charged to a specific job jobs when it is directly traceable.
which is then assigned Indirect labour - Charged to an overhead cost
to the jobs based on the pool and then assigned to various open jobs.
labour cost of the
employees.
Overheads Here, the overhead cost Non-direct costs: - Accumulated into one or
is accumulated in the more overhead cost pools from where they are
cost pools and then costs assigned to open jobs based upon the measure of
are allocated to jobs. cost usage.
The overhead allocation process for standard
costs uses historical cost information to arrive at
the standard rate per unit of activity and then
allocates these amounts to jobs based on their
units of activity.
The difference between allocated overhead costs
derived from the standard costing method is
subtracted from the actual cost incurred for the
job. The variance from the above is dealt with as
given in the notes below.
267
Methods of Cost Notes: The variance between the overhead cost and actual cost can be dealt
Accounting
with in any of the following manners.
 The variances are directly charged to the cost of goods sold. (or)
 It can be allocated to individual activities such as finished goods,
work-in-progress and cost of goods sold based on the ending balances
in these accounts. (or)
 It can be allocated to jobs that were open during the reporting period.

Check Your Progress Exercise 12.1

Note: a) Use the spaces given below for your answers.

b) Check your answer with those given at the end of the unit.

1. What is job costing?

……………………………………………………………………………
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2. What is a job cost sheet?

……………………………………………………………………………
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3. Give two examples of industries where job costing is applicable.

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Job Costing Example

The following information was recorded in the books of ABC manufactures

for the period ended 31-12-2019.

Cost Completed Job W.I.P

Raw materials supplied from stores 78,000 22,000
Wages 1,10,000 50,000
Chargeable expenses 8,000 2,000
Materials returned to store 1,000 -
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  Factory overheads are 80% of wages, office overheads are 25% of Job Costing and
Batch Costing
factory cost and selling and distribution overheads are 10% of the cost
of production.

 The completed job materialized for Rs. 4,50,000 /-

Consolidated Job Account as on 31.12.2019

Dr. Cr.
Amount Amount
To Raw materials By sales (amount materialized on 4,50,000
Consumed 78,000 jobs completed)
Less: Returned to
Store. 1,000 77,000
To wages 1,10,000
To chargeable expenses 8,000
To factory overheads (80% of 88,000
wages i.e., 1,10,000 * 80 / 100)
Factory Cost 2,83,000
To Administrative overheads 70,750
(25% of factory cost i.e.,
2,83,000 * 25 / 100)
Cost of Production 3,53,750
To selling and distribution 35,375
overheads (10% of the cost of
production i.e., 3,53,750 *10/
100)
Total cost/cost of sales 3,89,125
To transfer to the Profit and 60,875
loss account
Total 4,50,000 Total 4,50,000

Here are some illustrations on the Job Costing System:

Illustration 1:

A particular Job No. 100 of a company passes through three departments: X,

Y, and Z. The following information is given regarding this job:

Particulars Departments
X Y Z
Materials issued to the job (Rs.) 8,000 1,000 500
Direct labour hours for job (No.) 1,000 2,000 5,000
Rate of direct labour per hour (₹) 1.00 1.50 2.00
Sale of scrap materials arising from job (₹) 1,000 150 100
Total overheads for the departments (₹) 10,000 15,000 25000
Total labour hours for the departments (No.) 10,000 30,000 40,000
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Methods of Cost You are required to calculate Job Cost Sheet for the No. 100.
Accounting
Answer:

Particulars Amount
(₹) (₹) (₹)
Materials Less Scraps issued to job (₹)
Department X 7,000
Department Y 850
Department Z 400 8250
Direct Wages
Department X: 1,000 hours @ ₹ 1 per hour 1,000
Department Y:2,000 hours @ ₹ 1.50 per hour 3,000
Department Z: 5,000 hours @ ₹ 2.00 per hour 10,000 14,000
Prime Cost 22,250
Overheads
Department X: 1,000
Department Y: 1,000
Department Z: 3,125 5,125
Total Cost 27,375

Working Note: Calculation of overheads chargeable to Job No. 100.

Department X= Total Overheads in the Department/ Total Labour hours in

Department * Labour Hours in Department for Job No.100.

= 10,000/10000 * 1,000 = 1,000

Department Y = 15000/30000 *2000 = 1,000

Department Z =25000/40000 * 5000 =3,125

Illustration- 2:

The data pertaining to Heavy Engineering Ltd. are as follows at the end of
31.3.2022.

Direct material ₹ 9,00,000;

Direct wages ₹ 7,50,000;

Selling and Distribution overheads ₹ 5,25,000;

Administration overheads ₹ 4,20,000;

Factory overheads ₹ 4,50,000 and

Profit ₹ 6,09,000
270
Prepare a Cost Sheet showing all the details. Job Costing and
Batch Costing
For 2021-22, the factory has received a work order. It is estimated that the
direct materials would be ₹ 12,00,000 and direct labour cost ₹ 7,50,000.

What would be the price of a work order if the factory intends to earn the
same rate of profit on sales, assuming that the selling and distribution
overheads have gone up by 15%? The factory recovers factory overheads as a
percentage of direct wages, administrative and selling and distribution
overheads as a percentage of work cost, based on the cost rates prevalent in
the previous year.

Answer:

(a) Statement of Cost and Profit for the year 2021-2022

Particulars Amount (₹)

Direct Materials 9,00,000
Direct Wages 7,50,000
Prime Cost 16,50,000
Add: Factory Overhead 4,50,000
Works Cost 21,00,000
Add: Administration Overhead 4,20,000
Cost of Production/Cost of Goods Sold 25,20,000
Add: Selling & Distribution Overhead 5,25,000
Cost of Sales 30,45,000
Add: Profit 6,09,000
Sales 36,54,000

(b) Estimated Cost Sheet for the Work Order

Particulars Amount
(₹)
Direct Materials 12,00,000
Direct Wages 7,50,000
Prime Cost 19,50,000
Add: Factory Overhead 60% × 7,50,000 4,50,000
Works Cost 24,00,000
Add: Administration Overhead 20% × 24,00,000 4,80,000
Cost of Production/Cost of Goods Sold 28,80,000
Add: Selling & Distribution Overhead 40% × 24,00,000 9,60,000
Cost of Sales 38,40,000
Add: *Profit 7,68,000
Sales 46,08,000
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Methods of Cost Cost + Profit = Sales
Accounting
Or, ₹38,40,000 + 16.67 % × Sales = Sales

Or, 83.33 % Sales = ₹ 38,40,000

Or, Sales = 38, 40,000/83.33%= ₹ 46, 08,000

Or, *Profit = ₹ 46,08,000 - ₹ 38,40,000 = ₹ 7,68,000

Workings
(a) Percentage of Profit on Sales =Rs 6,09,000/Rs 36,54,000 * 100 = 16.67
%
(b) Percentage of Factory Overhead on Direct Wages=Rs 4,50,000/Rs
7,50,000 *100 = 60 %
(c) Percentage of Administration Overhead on Works Cost=Rs 4,20,000/Rs
21,00,000= 20%
(d) Percentage of Administration Overhead on Works Cost =Rs 5,25,000/
Rs21,00,000 * 100=25%
・ Revised Percentage of Selling and Distribution Overhead on Works Cost =
25% +15% =40%.

12.3 BATCH COSTING

Batch costing means accounting and calculating costs in respect of each batch
instead of accounting it for each and every unit. Batch means a number of
things or people which belong together as a group. An example of batch
refers to a group of students being taught together in schools, colleges and
educational institutions at a time. It may also refer to hundreds or thousands
of products manufactured together at one time. The purpose of doing so is to
reduce time, money and energy and pass on these savings to the ultimate
customer. Ever imagined if you were the only student to be taught in the
entire class your fees would be so high that education itself would be a
daydream for most of us? Thus, teaching was conducted for a number of
students together called a class or grades. The same is the case with
manufacturing companies when it comes to production.

Batch costing is a type of specific order costing where articles are

manufactured in predetermined lots known as batches. Here each batch is
treated as a separate cost unit and costs are accumulated and ascertained for
each batch. A batch consists of a number of units which are processed
simultaneously. The cost of each component in the batch is determined by
dividing the total cost by the number of articles produced.

12.3.1 Features of Batch Costing

 Batch costing is applied where identical units are produced.

272  All costs are accumulated and ascertained for each batch.
  Products lose their individuality as they are manufactured in Job Costing and
Batch Costing
continuous flow.

 Batch costing is used to calculate the total cost of each batch. Here all
raw materials are supplied on a batch basis and other expenses are
also paid on the basis of each batch.

 A separate batch cost sheet is used for each batch and is assigned a
certain number through which the batch can be identified.

 On completion of production the cost per batch is determined as

follows:

Cost Per Unit = Total Batch Cost  Total Units in Batch

12.3.2 Applications of Batch Costing

Batch Costing is applied in those industries where similar articles are
produced in definite batches for internal consumption in the production of
finished products or for sale to customers generally. It is generally applied
in –

 Readymade Garments Manufacturing Industries.

 Pharmaceutical / Drug Industries.

 Spare parts and Components Manufacturing Industries.

 Toys Manufacturing Industries.

 Tyres and Tubes Manufacturing Industries.

12.3.3 Process of Batch Costing

The process of batch costing involves the following steps:

Figure 12.2: Process of Batch Costing

 Identifying the Batch: Each batch of similar products is identified

and assigned a unique batch number or code.

 Batch Number Allotment: Once you identify the batch, thereafter

allot the number against each batch.
273
Methods of Cost  Accumulating Direct Costs: Direct costs related to materials, labour,
Accounting
and other specific expenses are recorded and allocated to the
respective batch.

 Allocating Indirect Costs: Indirect costs are allocated to batches

using a predetermined allocation base, such as direct labour hours or
machine hours.

 Preparation of Batch Cost Sheet: The total cost of each batch is

determined by summing up the direct costs and allocated indirect
costs.

 Analysing Batch Profitability: By comparing the total batch cost

with the revenue generated from the batch, profitability analysis can
be performed.

12.3.4 Difference between Job Costing and Batch Costing

The differences between Job Costing and Batch Costing are discussed in the
following table.

Table 12.2: Differences between Job Costing and Batch Costing

Job Costing Batch Costing

In this case, a single job or order is In this case, so many numbers of jobs
considered a “Cost Unit”. are treated as “Cost Units”.
It is used where client’s orders are It is used where a client’s orders are
different from each other. the sum of a few identical jobs.
The final product is different. The final products are identical in
nature.
It is customer-oriented. It is stock-oriented.
It is related to material, labour and It is related to only set-up costs and
overhead costs. inventory carrying costs.

12.4 ECONOMIC BATCH QUANTITY (EBQ)

Now the most important point that comes up here is how many units are to be
produced in a batch. Frankly answer to this depends upon the demand and
supply of the required product, production facilities of the company and
various other factors that are necessary for smooth functioning such as
availability of the raw materials or labour and sometimes government
regulations. Assuming every above factor is in favour of the company, still,
the question of how many units should be produced in a batch is still decided
by the concept of Economic Batch Quantity (EBQ)

This theory is in similar lines with that of the theory on Economic Order
Quantity (EOQ). Here EBQ refers to the optimum batch size that the
274
company should manufacture so that the set-up cost and the carrying costs in Job Costing and
Batch Costing
relation to finished goods are optimum (lowest).

Set-up costs are incurred before the production starts. These consist of
indirect material costs, labour costs of workers or engineers setting up the
machine, overheads of the service department charged to the respective batch
such as overheads of the Boiler House Department and other indirect
expenses. The nature of expenses is such that they are incurred for each and
every batch produced. The larger the batch size lower would be the set-up
costs and vice versa.

The other cost is, carrying cost, incurred for carrying or holding inventory
which majorly consists of interest and storage costs. The larger the batch size
higher the carrying costs and vice versa. Both these costs are of a conflicting
nature. Therefore, a trade-off between set-up costs and carrying costs is
achieved with the help of EBQ.

Mathematical Formula

EBQ = Square root of (2DS / C)

D = Annual demand for the finished product.

S = setting up costs for each batch.

C = Carrying cost per unit of production.

Here are some illustrations on EBQ:

Illustration 3:

From the following information, calculate the Economic Batch Quantity for a
company using batch costing:
Annual Demand for the components 2400 units

Setting up the cost per batch ₹100

Manufacturing cost per unit ₹200

Carrying cost per unit 6% p.a.

Answer: E.B.Q =√2DS ÷ C

E.B.Q =√2×2400×100÷ 6% of 200
= 200 units

Illustration 4:

ABC Ltd. is committed to supplying 24,000 bearings per annum to BC Ltd.

On a steady basis. The projected monthly cost of inventory keeping for each
bearing is 10 paise, and the setup cost for each run of bearing production is
₹324.
275
Methods of Cost a) What would be the optimum run size for bearing manufacture?
Accounting
b) What is the minimum inventory holding cost at optimum run size?
c) How much more money would the firm spend compared to the ideal
run stated in (a) if the company had a strategy of producing 6000
bearings every run?

Answer:

(a) Optimum production Run Size (Q) = √2DS/C

Where, D = No. of units to be produced within one year
S= Set-up cost per production run
C = Carrying cost per unit per annum
=√2×24000×324 ÷ 0.10×12 = 3,600 units

(b) Minimum inventory Holding Cost, if run size is 3600 bearings

= Average inventory x carrying cost per unit
= (3600/2) x (.10 x 12) = ₹ 2160

(c) Statement showing Total Cost at Production Run sizes of 3600 and
6000 bearings

A. Annual requirements 24000 24000

B. Run size 3600 6000
C. No. of runs (A/B) 6.667 4
D. Set up cost per run ₹324 ₹ 324
E. Total set-up cost (C X D) ₹2160 ₹1296
F. Average inventory(B/2) 1800 3000
G. Carrying cost per unit p.a. 1.20 1.20
H. Total carrying cost (F x G) 2160 3600
I. Total cost (E+ H) 4320 4896

Extra cost incurred, if run size is of 6000 = ₹4896 – ₹4320 = ₹576

Check Your Progress Exercise 12.2

Note: a) Use the spaces given below for your answers.

b) Check your answer with those given at the end of the unit.

1. What is batch costing?

……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
……………………………………………………………………………
276
2. Mention two industries where batch costing is applicable. Job Costing and
Batch Costing
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……………………………………………………………………………

Activity 12.1:

Visit a nearby agri farm, collect cost data for a particular crop production and
prepare a Job Cost Sheet.
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…………………………………………………………………………………
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12.5 LET US SUM UP

In this unit, you have already learnt the following:

 Job costing is a costing method used to determine the cost of specific

jobs, which are performed according to the customer’s specifications

 Job costing is applicable in industries such as printing press,

automobile garages, repair workshops, shipbuilding, foundry, and
other similar manufacturing units, which manufacture according to
customer’s specific requirements.

 Batch costing means accounting and calculating costs with respect to

each batch instead of accounting it for each and every unit. Batch
means a number of things or people which belong together as a group.

 Batch costing is generally applicable in readymade garments

manufacturing industries, pharmaceutical/drug industries, spare parts
and components manufacturing industries, toys manufacturing
industries, and tyres and tubes manufacturing industries.

 Economic batch Quantity (EBQ) refers to the optimum batch size that
the company should manufacture so that the set-up cost and the
carrying costs in relation to finished goods are optimum(minimum).

12.6 KEYWORDS
Batch costing : Batch costing means accounting and calculating
costs in respect of each batch instead of accounting
it for each and every unit. This cost accounting 277
Methods of Cost method is used by companies that manufacture or
Accounting
produce goods in batches.

Batch : Batch means a number of things or people which

belong together as a group.

Carrying Cost (or : It is incurred for carrying or holding inventory

Holding Cost) which majorly consists of interest and storage
costs. The larger the batch size, the greater be
number of units in inventory.

Economic Batch : It is the maximum batch size that should be

Quantity produced at a given time in order to optimize set-
up and processing costs as well as carrying costs.

Job costing : It is a cost accounting method that traces costs to

individual units or to specific jobs by using a job
cost sheet or job cost card.

Job : A job is simply a product or service that can be

easily and at a reasonable cost distinguished from
other products or services. It refers to any specific
assignment, contract or work order wherein work is
executed as per the customer's specific
requirements.

Set-up Cost (or : Set-up costs are incurred before the production
Preparation Cost) starts. These consist of indirect material costs,
labour costs of workers or engineers setting up the
machine, overheads of the service departments and
other indirect expenses. The nature of expenses is
such that they are incurred for each and every batch
produced.

12.7 SUGGESTED READINGS/ REFERENCES

1. Bhattacharyya, A. K., Cost Accounting for Business Managers, Elsevier.
2. Desai Fruits & Vegetables Pvt. Ltd., Farmer’s Handbook on Basic
Agriculture, Navsari, Gujarat India, Second Edition, 2016, pp 115-120).
3. Khan, M.Y. & Jain, P.K., Management Accounting, TMH.
4. Kishore, R. M., Cost and Management Accounting, Taxmann.
5. Lal, J & Srivastava, S., Cost Accounting, TMH.
6. Maheshwari, S.N., Cost and Management Accounting; Sultan Chand &
Sons.
7. Saxena, V.K. & Vashist, C.D., Cost and Management Accounting; Sultan
Chand & Sons.
278
8. Study Materials of ICMAI (CMA Intermediate, Paper 8) (Retrieved from: Job Costing and
Batch Costing
https://icmai.in/upload/Students/Syllabus2016/Inter/Paper-8-January-
2021.pdf)

12.8 ANSWERS TO CHECK YOUR

PROGRESS EXERCISES
Check Your Progress Exercise 12.1

1. An order-specific costing technique, used in situations where each job is

different and is performed to the customer’s specifications is called job
costing.

2. Job cost sheet is a document used to record manufacturing costs and is

prepared by companies that use job-order costing systems to compute and
allocate costs to products and services.

3. Two industries where job costing is applicable are: (a) the Printing Press
Industry (b) the building Industry.

Check Your Progress Exercise 12.2

1. Batch Costing is that form of costing under which each batch is treated as
a cost unit and costs are accumulated and ascertained separately for each
batch. Each batch consists of a number of identical units.

2. Two industries where batch costing is applicable are (a) Pharmaceutical/

Drug Industries and (b) Readymade Garments Manufacturing Industries.

279