Which business is most likely to use batch costing?
Correct answer: D. A bakery producing groups of identical cakes
- A. A refinery producing identical output continuously
- B. A construction firm building a unique bridge
- C. A hospital providing patient-specific services
- D. A bakery producing groups of identical cakes
Explanation
Batch costing accumulates costs for a group of similar units produced together, such as a batch of cakes. Continuous identical output is associated with process costing, while unique contracts commonly use job costing.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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