Session Objectives: In this chapter we shall deal with Job costing Batch costing Contract costing

Methods of Costing? The methods used for the ascertainment of cost of production primarily depend on the manufacturing process and the methods of measuring the departmental and finished goods. Basically, there are two methods of costing:

Job costing is a form of specific order costing that applies where work is undertaken to meet customers special requirements and each order is of comparatively short duration. Objectives:

a. To find the cost of production of every job or order and to know the profit or loss made in its execution. This ultimately helps the management to judge the profitability of each job and decide the future course of action. b. c.
To make more accurate estimates for costs of similar jobs to be executed in future. To control the operational inefficiency by making a comparison of actual costs with estimated costs.

d.

To provide a valuation of work-in-progress.

This method of costing should possess the following features: The production is generally against the customers order but not for stock.