Costing Methods-II
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of the Operating Costing method?
Operating costing is used to ascertain the cost of providing a service or operating a service undertaking, such as transport, hospitals, or banking operations, where output is measured in service units.
What is the main feature of Multiple Costing?
It combines two or more costing methods for complex products.
Which industries commonly use Operating Costing?
Transport companies, hospitals, hotels, electricity supply undertakings, and banking/financial service institutions commonly use operating costing to measure cost per service unit.
Which costing method is used when output is measured in service units rather than physical units?
Operating Costing (Service Costing) is used for service units.
How is the cost unit defined under Operating Costing for a transport business?
In transport businesses, the cost unit is typically expressed as 'cost per tonne-kilometre' or 'cost per passenger-kilometre', combining weight or passengers carried with distance travelled.
What is the cost unit used in hospital Operating Costing?
Patient-day or bed-day is the cost unit in hospitals.
What is Batch Costing and when is it applied?
Batch Costing is a form of job costing where costs are accumulated for a batch of identical products treated as a single cost unit; it is applied where goods are produced in batches rather than continuously.
What distinguishes Uniform Costing from other costing methods?
It uses standardised costing principles across multiple firms in an industry.
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