Introduction to Costing Systems

Today different business and industry needs different costing systems to meet their individual requirements. It is not possible to devise a single costing system to fulfill everybody’s needs. Different methods of costing for different industries depending upon the type of manufacture and their nature have been developed. Various methods of ascertaining costs are available to suit the business need. But the basic principles are the same in every method. The choice of a particular method of costing depends on the nature of business of the concern. There are two basic methods of costing viz. – (a) Specific order or job costing (b) Continuous operation or process costing Brief description of each of the methods are as follows: