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

Which of the following is the most appropriate costing method for an industry such as a brick kiln or cement plant, where output consists of identical units produced continuously and costs are collected for a period?

Unit costing, also called single or output costing, is appropriate because bricks and cement are identical units produced continuously. Cost is accumulated for a period and divided by the number of units produced to get cost per unit, unlike job, batch or contract costing.

  1. AUnit costing (single or output costing)Correct
  2. BBatch costing
  3. CJob costing
  4. DContract costing

Explanation

Unit costing suits industries producing homogeneous units in a continuous flow, such as bricks, cement, or coal. Total cost for the period is divided by units produced. Batch costing applies to groups of identical items made as separate lots, and job costing to customer-specific orders.

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