CA Intermediate · Cost and Management Accounting · Unit & Batch Costing
Which of the following is the most suitable method of costing for a brick kiln that produces identical bricks continuously in a single type and size?
Unit costing, also called single or output costing, is suitable because the kiln makes one uniform product continuously. Cost per brick is found by dividing total cost by total units. Batch, job and contract costing fit lot-based, customer-specific or long-term project work instead.
- ABatch costing
- BUnit costing (single or output costing)Correct
- CJob costing
- DContract costing
Explanation
Unit costing suits industries that make a uniform product in a continuous stream, such as bricks, cement or coal. Batch costing applies when a group of identical items is produced as a lot against an order, and job costing applies to customer-specific work. Contract costing applies to large long-term projects.
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