According to Harold Wheldon,"Costing is the classifying, recording and appropriate allocation of expenditure for the determination of cost". Cost management requires costs to be determined , either bytracingthe cost to acost object,direct costing, or byallocatingthe cost based on acost allocation basee.g. direct manufacturing hours , thus providingindirect costing.

CONTRACT COSTING
Contract here means an agreement to complete a large scale project involving construction of building or any other engineering work which need many days, months or years to complete.

Eg: concerns of builders, public works contractors, constructional and mechanical engineering firms and ship builders

The contractor prepares separate accounts for separate contract and since the project runs for a longer period of time, same contract account will continue till end and every year the accounts are balanced and the amount of profit is calculated

1.The cost unit is a specific contract.
2.Each contract takes a long time to complete.
3.The work being of a constructional nature, the same is executed at customer’s site, as per his specifications.

4.Bulk of the materials are purchased and delivered direct to the contract site or obtained from the central stores through the requisition slips.

5.Most of costs which are normally treated as indirect can be identified specifically with a particular contract and are charged to it as direct costs.

6.Overheads constitute only a very small proportion of the cost of the contract. However, indirect costs consist mainly of administrative cost of the central office.

7.Scale of operations and cost control become difficult due to theft of materials, labour time utilization, pilferages etc.

JOB COSTING
Job costing or job order costing also called specific order costing is a method of costing which is used when work is undertaken as per the customer’s special requirement (tailor-made). It is distinct from contract costing in the sense that each job is of a comparatively short duration. The job may be carried out within the factory/workshop or on the premises of the customer, depending on the nature of job.

The main features of job order costing are that in this method of cost ascertainment, costs of materials, labour and overhead are accumulated for each job and profit of loss on it is determined. When an enquiry is received from the customer, costs expected to be incurred on the job are estimated, and on the basis of this estimate, a price is quoted to the customer. When the job has been completed, the actual costs can be compared with the estimated costs (or a standard cost is a system of standard costing is in vogue). This serves as a tool of cost control.

BATCHCOSTING
Such costing is a modification of job costing. It is used where articles are manufactured in definite batches and help in stock for assembly of components to produce finished product or for sales to customers. A batch, in fact, is a cost unit consisting of a group of identical items which maintain their identity throughout one or more stages of production. Batch costing is generally followed in toy making, aircraft manufacturing, bakeries, biscuit factories, radio-sets and watches manufacturing factories, where manufacture of products or components can be done more conveniently in batches of a definite number.

OPERATING/SERVICE COSTING:-
Service costing involves the method of determination of the cost of services. The cost of providing a service is computed at ease. At the end of specified periods, the expenses (costs) of operating a service are grouped under suitable headings. The aggregate of these costs is to be divided by the quantity of services provided during the specified period to arrive at the cost per unit of service.

TRANSPORT COSTING
Service costing method is used to ascertain the cost of services provided by an organization (transport firm) which uses its vehicles for transporting goods or passengers. In motor transport costing, the cost unit is tonne-km or passenger-km.

Objectives of Motor Transport Costing:-
1. Analysis of operating costs, namely, wages, full cost, insurance, repairs and maintenance.
2. Control of operating and running costs and avoidance of waste of fuel and other consumable material.

3. Comparison of cost of running and maintenance of different vehicles.
4. Assignment of costs to services provided by each vehicle.
5. To quote hiring rates.
6. To compute cost of idle vehicle and lost running time.
7. Collection and analysis of cost for cost control.

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