AMUL COSTING METHOD ANALYSIS:

AMUL predominantly manufacture milk , milk products and ice cream . So all
these cost objects are produced in batches and all of them use traditional
method of Process Costing. Amul uses Process costing because their goods or
services result from a sequence of continuous or repetitive operations of
processes. Costs are averaged over the units produced during the period.
Process costing is suitable for industries producing homogeneous products and
where production is a continuous flow. Managers of the firm need to maintain
cost control over the manufacturing process. Process costing provides
managers with feedback that can be used to compare similar product costs
from one month to the next, keeping costs in line with projected
manufacturing budgets. So considering all these factors , Amul currently
employs Process Costing while costing their cost objects.