Costing means the process of ascertainment of costs. The types are:-
Historical
costing
A measure of value used in accounting in which the price of an asset on
the balance sheet is based on its nominal or original cost when acquired by the
company. The historical-cost method is used for assets in the U.S. under
generally accepted accounting principals (GAAP).
Marginal
Costing
The accounting system in which variable costs are charged to cost units
and the fixed costs of the period are written-off in full against the aggregate
contribution.
Uniform
costing
It is good costing system to operate a business in which all the
companies in any industry follow the same type of costing principles and
methods. For example, we talk about electrical industry. Bajaj International
Private Ltd, Bharat Heavy Electricals Limited (BHEL), Centre for Electronics
Design and Technology and Crompton Greaves Limited (CGL)are the main electrical
companies. If these companies join and make a costing system in which they will
use same costing methods and techniques, then it will be said that these are
following uniform costing.
Standard
costing
It is an accounting system designed to properly allocate costs of
direct labor, indirect labor, materials, overhead, and selling/
general/administrative accounts on a unit basis for the purpose of accurately
costing products and the subsequent control of those costs in managing the
production, marketing, purchasing, and administrative functions of the
business.
Job
costing
Job costing is an order-specific costing technique used in situations
where each job is different and is performed to the customer's specifications.
ex-Machine tool manufacturers, Builders uses this accounting system.
Batch
costing
Batch cost is a costing that is incurred when a group of products or
services are produced. ex-Garments, Packet food etc. uses batch costing
Process
Costing
Process costing is a costing methodology where manufacturing is carried
out as a continuous process. ex-Steel industries, Soap industries etc. uses
this costing system
Operating
costing
Operation costing is used when cost per unit of a product or service or the annual cost incurred on a continuous
process .
ex-Educational institutions, Transport companies etc. uses operating
costing
Operation
costing
Operation costing is a mix of job costing and process costing. In this
system operation is carried out by a number of distinct operation
ex-Suppose, the operation unit cost of an industry is a,b,c,d therefore
the operation cost for the production of that industry will be a+b+c+d
Multiple
costing
Multiple costing is that costing which is used when industries produce
a number of components and then assemble them into a final product.
ex-Automobile, Aeroplane etc. industries uses this system
