Question

For Naked Coconut there would be only one type of batch cost True O False

Please verify my answer. Thanks!

Answer 1

Types of cost in Batch Costing :-

1. Set up Cost

It is the cost incurred to order or cost for setting up the machine for a running the Batch. If the batch size is increased, set up cost per unit will come down and vice-versa. It fixed per batch and does not differ in respect of quantity.

2. Carrying Cost

It is the cost incurred to maintain the quantity order or produced in the batch. If the Batch size is increased. it will increase the carrying cost and vice-versa. It is variable cost based on the quantity of goods ordered or produced in the batch

Naked coconut in batch costing includes both Setup cost (ordering or producing the product in batch) and carrying cost (for maintenance of goods).

False is the correct answer