Question

Most businesses can be classified into one or more of these three categories: manufacturing, merchandising, or service. Some companies combine aspects of two or all three of these categories within a single business. Some of the costs are similar across different types of businesses; others are unique to a particular business. Think about the different types of businesses and provide some examples of costs that they may incur (and some that may not).

Answer 1

Industry differ in their nature , the product they produced and they offered service . In this situation , we noticed different method of costing . the method to ascertainment of cost depend on the nature of Industry .

Job costing and process costing are the basic method of costing . Job costing is suitable for manufacturing Industry . process costing is suitable where production is continuous

Unit costing calculated on the basis of units produced

Contract Costing –Unit cost in a contract for long period of time ,

Service costing – this method of costing applicable relates to different service Industry

Composite Costing –This method applicable where number of components are manufactured separately and then assembled in a final product

Batch Costing – Batch wise ascertainment of cost

Under manufacturing unit – costs are accumulated and assigned to product on the basis of – a) Specific order costing b) Operating costing

Operating costing system applicable where undertakings which render service as against manufacturing and supply of products