ICAEW BIP · Chapter 3 · Question 4 of 8
Brightline Printers produces leaflets to customers' orders. A typical order is a run of 5,000 identical leaflets printed to one customer's design, and each order is costed separately. Which costing method is most appropriate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Batch costing
Explanation
Batch costing is used where a group of identical units is made together as one order. The costs of the run are collected as for a job and then divided by the number of units in the batch to give a unit cost. Process costing suits continuous mass production of identical output rather than separately identifiable customer orders, and costing each leaflet as an individual job would be impractical because the units in a run are identical.
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