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CA Intermediate · Cost and Management Accounting · Unit & Batch Costing

Which of the following is a feature of batch costing that distinguishes it from unit costing?

In batch costing, a group of identical units produced together is treated as a single cost unit. The total batch cost is accumulated and then divided by the batch quantity to get cost per unit, unlike job, process or contract costing.

  1. ACost is accumulated for a group of identical units produced together, and the batch is treated as the cost unitCorrect
  2. BCost is accumulated for a single customer-specified job only
  3. CCost is accumulated separately for each process stage
  4. DCost is accumulated for each contract over several years

Explanation

In batch costing a batch of identical products is treated as one cost unit, and cost per unit is found by dividing batch cost by the number of units in the batch. Job costing handles a single customer order, process costing handles continuous stages, and contract costing handles long-term projects.

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