STATEMENT1 Batch costing is similar to job costing in that each batch of similar articles is separat...........

Costing - Phase (I & II) Methods of Costing

STATEMENT1: Batch costing is similar to job costing in that each batch of similar articles is separately identifiable.

STATEMENT2: The cost per unit manufactured in a batch is the total batch cost divided by the number of units in the batch.

Which of the following is correct?

both statements correct

both statements are incorrect

either 1 or 2

neither 1 nor 2

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Explanation:

batch costing is one which applies when a quantity of identical items are manufactured as a batch. It is very similar to job costing but the main feature of batch costing is that the unit cost is the ratio of the total cost of the batch to the number of units in the batch. This method is widely used in the footwear and clothing industries where similar items are manufactured.