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

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

Batch costing treats a group of identical units produced together as the cost unit, and unit cost is found by dividing total batch cost by batch quantity. Job costing instead deals with a single customer-specific order, while process costing deals with continuous production.

  1. AEach cost unit is a single customer-specified order that is never repeated
  2. BA group of identical units is produced together and the batch is treated as the cost unitCorrect
  3. CCosts are accumulated for a continuous flow of output through successive processes
  4. DCosts are collected only after the entire financial year is over

Explanation

In batch costing a lot of identical products is manufactured together, and the batch is the cost unit; cost per unit is batch cost divided by units in the batch. Option A describes job costing, and option C describes process costing.

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