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The question is :
Which Two of the following are most likely to use batch costing ?
A – a bakery
B- a film making company
C- a footwear manufacturer
D- an oil refineryWhy the answer are A and C ?
Even though the explained ” batch costing would be used in industries that produce similar , separately identifiable product such as in footwear and baking
It would not be used where the product are not similar such as film making or where process I more appropriate such as oil refinery ”
I still don’t understand the point of it. What do they mean ” produce similar “, but ” separately identifiable product ” ?
As film and oil are also separately product .And a bit silly but …. how can ” bakery ” ( something that we can eat ) is similar with ” footwear ” ( something that we wear )
Thanks Mr JohnBatch costing is relevant when batches of identical products are made (such as identical cakes in the bakery, or identical shoes in footwear).
Films are different because every film is different from each other and will have different costs.
Oil is different because they are not producing separate identical units.
So .. is it correct if I say a wine factory or soft drink company won’t use batch cost ?
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