Methods of Costing

The various methods of costing available are as below:

• Job Costing - This is done, as the name suggests, on job works which may differ from case to case basis. By
giving different job numbers and debiting the costs on the jobs, cost of each job work can be ascertained. 
• Batch Costing - This is similar to job costing but pertains to batches. 
• Contract or Terminal Costing - This is done for large contracts. Such businesses need not maintain costs
separately as financial accounting will indicate the costs and expenses. In such contracting firms, the cost
sheets are maintained for individual contracts. In the absence of expense budgets, inefficiencies are often
hidden in such cost sheets.
• Single or Output Costing - This is done when the end product is single like a colliery or a power station. Cost
sheets are maintained. 
• Process Costing - This is useful when a product passes through various processes, yielding different by
products of commercial value. This is useful in industries like refineries.
• Operation Costing - This is followed by mechanical engineering industries which make products or parts.
Each manufacturing operation cost is taken into account. There is no difference between this and process
costing. 
• Operating Costing - This method is followed when the company does not have a specific product as output
like the service industries. 
• Departmental Costing - When an end product is ultimately manufactured by different departments this
method can be useful. 
• Multiple Costing - This is useful when a product is manufactured in an assembly line like an automobile.