[Methods, Types, Concpet&Classification]

. One of the main objects of cost accounting is cost assertainment. So that cost assertainment
deals with:

(1) Collections and analysis of expenses.

(2) Measurement of production.
(3) Liking up of production with the expenses.

TYPES OR TECHNIQUES OF COSTING

Uniform Marginal Standard Historical Direct Absorption

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(1) It is the use of some costing principles and practices of several undertaking for common
control on comparison of costs.
(2) It is the ascertation of marginal cost by differentiating between fixed and variable cost.
(3) A comparison is made of the actual cost with a predetermined standard cost and all the
cost of any deviation is analyzed by causes.
(4) It is ascertainment of costs often they have been incurred. It aims at ascertaining costs
incurred on work done in the past.
(5) It is the practice of changing all direct costs, variable cost relating to operations, process
or products leaving all other costs to be written off against profits in which they arise.
(6) It is the practice of changing all costs, both variable and fixed in operations, process or
products. The different from marginal costing where fixed costs are excluded.

Methods of Costing
Basically there are two methods of costing.
(1) Specific Costing/ Job Costing / Terminal Costing
(2) Operation Costing/ Process Costing/ Period costing
(1) Specific Order Costing: In this category basic costing methods applicable where the work
consists of separate jobs, batches or contracts each of which is authorized by a specific
order or contract this category one included job costing, batch costing and contract costing.
(2) Operation Costing: In this category of basic ,methods applicable where standardarised
goods or services result from a sequence of repetitive and more or less continuous
operations or process to which costs are changed before being over gazed over units
produced during the periods.

 It includes process costing .services costing, operation costing, and multiple

operations coasting.

(3) Multiple Costing

(.) It represents the application of more than one method of costing in respect of the same
products.
(.) This is suitable for industries where a number of component parts are separately produced
and subsequently assembled with a fixed product.
(.) This method is used in factories, manufacturing cycles, automobiles, engines, radios etc.

(4) Job Costing

(i)This method are collected and accumulated for job,, work, order or project separately.

(ii) Each job can be separately identified so it becomes essential to analyses the cost according to each
job .

(iii) This method is applicable to printers, machine tool manufacturers, foundries and general
engineering workshop.

(5) Contract Costing

(.) When the job is big and spread overlarge periods of time the method of contract costing is used.
(.) A separate account is kept for each individual contract.
(.) This method is applicable by builders, civil engineering, construction, constructional and
mechanical engineering firm etc.

(6) Batch Costing

(.) A Batch may represent a number of small orders passed through the factory in batch.
(.) Each batch is treated as a unit of cost and separately costed.
(.) This method is mainly applied in biscuits manufacture, garments manufacture, spare parts etc.
(7) Process Costing
(>) This is suitable for industries where production is continuous manufacturing is connected on by
distinct and well defined processes, the ,,,,,,,,,,,,,,,,,,,, product of one process becomes the new
material of the subsequent process, different products with or without by produced simultaneously
at the same process and products produce during a particular process are exactly identical.
(>) Definite products are obtained at the end of each process, it will be necessary to ascertain not
only the cost of each process but also cost per unit of each process.