5.4.2—Costing approaches

Job, batch, unit and process costing assign or average costs in different production contexts. The approach should match the traceability, variety and volume of the output.

A costing method influences pricing and profitability information; it is a model of resource use, not a perfect measure of economic value.

A bespoke consultancy can trace labour and materials to one job, while a continuous chemical process may average costs across a large output stream.

A cost per unit is only meaningful when the cost pool and output basis are clearly defined.