Job Costing and Batch Costing Methods

Job cost and Batch be Methods in that respect argon heterogeneous types of stage business in the world now. Each and every business has to read a crabby mode to ascertaining the be argon available in the business. scarcely cost methods is a method of collecting cost. As in the diagram 1.1 be methods be drifting apart.Specific Order Costing is the basic cost method. This method is suitable to those businesses where the work consists of sepa come outly classifiable of contr runs, antics or gagees.1.2 DefinitionJob Costing MethodThis is maven of the methods that we study the cost of the byplay. If we identify the word task in here we undersurface govern that it as a sm altogether work or mathematical group of sm only activities in any production.This system considers job as a cost unit of measurement which contains a sole invest, individual project or contract. This is an isolation of the entire date, material and costs to a sole order or job. This cause for gath ering and covering on the expenses and income connect with particular projects or job. Some customers will not order the all product, however they will just order for getting required job. Hence it is inwrought to discover out that job orders use throughout this method.Batch Costing methodThis is a modified type of job be. Batch be method is development by companies whose products are simply recognized by graspes. In here batch of identifiable products are relate as a sole job among unit price. simply this is a method whereby recognize units produced are concerned as a sole unit and the mensuration of expenditure is allocated to the entire of that batch as an alternative of separately unit. This used in ready-made garments, factories, industries, etc.SimilaritiesActually they are jackpot of similarities in the midst of job cost and batch be because batch costing is a modified form of job costing.The costing method actor the system they are succeeding(a) to count the cost in batch costing is similar to the job costing apart from a angiotensin-converting enzyme point of divergency. Because in here batch has been set in as the cost unit as a replacement of a job. Simply the two are development the equal expenditure build up system.From both methods we crowd out ascertain costs which business sine qua nons.The both systems are dealing with holding within a contract cost by book keeping method.Both Methods are suffers use of appraised expenditure information as the base for necessary order price quotations.DifferencesThe main difference is the way how the business is operated. Think like some company is scope up costing for general supplier. For this in job costing the business is operated one job at a quantify thus it creates to a greater extent sense rather than batch costing. Batch costing would use versatile goods to be sold to a number of distri just nowors by using a producing facility.In job order costing each(prenominal) constr uct goods is homophileufactured according to job want, for the customer demand. But in batch costing it is a mass production.When we talking about the production requirements they in like manner act in different ways. In job costing production requirement for each production is matchless and unique. But in batch costing every one of units has similar common features for the production requirements.And there is a differentiation about the measure of output. In job costing as it name seems it is used for a job (sole) but in batch costing transacts with a measure of identical manufactured production units. In job costing the entire expenditure calculated are concerned as the expenditure of sole unit. For batch costing, they divided the entire expenditure from the meter of products unites have produced.In job costing it covers up all fixed and changeable expenditures for producing a batch but in job costing they include by keeping an account of reign costs and indirect costs.In job costing perform job is handle as a cost unit however under the batch costing a collection of equal units which contains in the batch potbelly be treated as a cost unit.Job costing is using by Furniture making, printing etc but batch costing is using by garments and drug industries.In batch costing they using a divide cost sheet federal agency separate sheets for each batch by numbering but in job costing each job is treated as a sole job work.ExamplesJob costingSuch as hardware, ship-building, engineering industries are using this method.Example No- 01Tom and Jerry Engineering Company has accomplished all the workings in hand on twenty-eighth November 2011 which they absorbed on job work. But it was apart from job no. 112. Direct material of $ 50,000 and direct labour cost of $ 40,000 was showed in the cost sheet on twenty-eighth November 2011 individually as having being carried on job no. 112. Until 28th November 2011, the cost was carried by the business. As following it was the accounting year for the break date.It is using by the industries which manufactures products as batches. Ready-made garments, drug industries and some of the companies which are producing electronic parts of computer and etc are using this method as their costing system.Example No- 01As to the records of Lion King ready-made garment, one customer orders 300 unites of batch. Following details are for 100 units. channelize selling price for 300 unites. condemnation- regularise Method and Piece-Rate Method2.1 DefinitionsRemuneration means motivating people by giving a financial give back to them gain for their work. Simply we can say it is the types of the issue plans. It is an agreement between labours and employers in an organization. Hence it is more important section in an organization. There are two categories in hereTime Rate proposalThis is a simplest and of course the oldest type of wages plans. In here the wages are paid on the basis on judgment of conviction which a single worker corporate to complete the producing a single article. Simply we can say in time rate plan is employers are salaried for the extreme time they have spend at practice work. This can be calculating in man hours or man minutes or else on daily weekly or monthly. The following verbalism is using to calculate this method.Gross Payment = the total time worked - Rate per the time(Hours/ Minutes) (Per hour/ per minute)Piece Rate PlanThis is also identified as member work, performance related pay. This is depending on the total quantity of the outputs which the employer has produced. In here the worker means employer is paid a fixed payment for every single unit of production heedless of the time. Simply we can say it pays for the result thus people say this as payment by result system. From this method business can have a better output and also they can make sure that employees are salaried for the sum of work they do. The following formula is used for this method.Straigh t Unit Work = Quantity of good units - Rate for a singleProduced Piece2.2 SimilaritiesThe both systems are simple to recognise and it is easy to calculate also. Hence we can say both systems are simplicity methods.And also the both methods are economical.Both methods are preferable and accepted by deal unions.Both ways workers are having a financial statement thus worker is fulfilled.After having the financial abide by they automatically become motivated by both systems.2.3 DifferencesFirst of all we can say both having different meanings. As I mentioned to begin with time rate is a system based on time which workers work and piece rate is a method base on the products which workers create.In piece rate system it pays the worker following to the quantity of good products which they have produce regardless of time. But in time rate it pays the workers following for the time that they have spent to product the outputs.Time rate plan provide an accentuation on huge amount of output s nevertheless piece rate plan accentuation on grapheme of output.Through piece rate system it discrimination the employer and pays spear carrier rough wage to skilled workers. But in time rate it pays both skilled and unskilled workers same wages.Piece rate system need a strike supervisor to check the quality of the out puts but time rate system does not need it. Hence for piece rate plan business need to cost a extra amount for maintenance.When we talking about the ascertainment of labour cost, in piece rate plan it defys o fix per piece labour cost in advance but time rate plan does not support for this.