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The main costing methods available are process costing, job costing and direct costing Each of these methods apply to different production and decision environments The main product costing methods are: Job costing:This is the assignment of costs to a specific manufacturing job This method is used when individual products or batches of

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3 Methods of Costing Having defined and discussed some of the more commonly used costing and accountancy terms, we are now in a position to investigate the major types of costing systems used in manufacturing industry Methods of Costing Costs

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Activity based costing is a costing methodology that aligns an organization’s resources and their activity to the company’s products and/or services as it relates to their cost consumption Unlike job costing methods, ABC costing incorporates more indirect costs into direct production activities to help drive pricing decisions

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Methods to be used for the ascertainment of cost of production differ from industry to industry It primarily depends on the manufacturing process and also on the methods of measuring the departmental output and finished products Specific Order Costing is the category of basic costing methods

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Activity based costing is a costing methodology that aligns an organization’s resources and their activity to the company’s products and/or services as it relates to their cost consumption Unlike job costing methods, ABC costing incorporates more indirect costs into direct production activities to help drive pricing decisions

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Methods to be used for the ascertainment of cost of production differ from industry to industry It primarily depends on the manufacturing process and also on the methods of measuring the departmental output and finished products Specific Order Costing is the category of basic costing methods

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The following are the important methods of costing Job Costing: Job costing is concerned with the finding of the cost of each job or work orderThis method is followed by these concerns when work is carried on by the customers request, such as printer general engineering work shop etc under this system a job cost sheet is required to be prepared find out profit or losses for each job or work

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Methods or Types of Costing Basically, costing is divided into two methods They are job costing and process costing Even though, two more costing methods are generally used by some manufacturing concerns They are composite or multiple costing and farm costing

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Operating Costing: This is suitable for industries, which render services as distinct from those, which manufacture goods This is applied in transport undertakings, power supply companies, gas, water works, municipal services, hospitals, hotels, etc

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