Chapter 4 Costing Methods I: Specific Order Costing

Abstract

A costing method refers to a particular procedure or technique designed to ascertain or determine the cost of a product or service. It is defined as the processes involved or adopted in the accumulation and ascertainment of a product of a product or service. It therefore follows that each firm develops or design its own costing method which suits its own nature of business or service delivery method.

Basically, we have two categories of product costing methods, namely specific order costing and continuous operation. Continuous operation is also known as process costing, unit or average costing method.