Question

Electricity generating company should employ
(a) Unit costing
(b) Process costing
(c) Operating costing
(d) Multiple costing

Answer 1

Answer:

process costing

A hybrid costing system is a cost accounting system that includes features of both a job costing and process costing system. ... Many companies do not realize that they are using a hybrid costing system - they have simply adapted their cost accounting systems to the operational requirements of their business models.

unit costing

A unit of production for which the management of an organization wishes to collect the costs incurred. In some cases the cost unit may be the final item produced, for example a chair or a light bulb, but in other more complex products the cost unit may be a sub-assembly, for example an aircraft wing or a gear box.

operating costing

Operating cost is a total figure that include direct costs of goods sold (COGS) from operating expenses (which exclude direct production costs), and so includes everything from rent, payroll, and other overhead costs to raw materials and maintenance expenses.

multiple costing

Multiple costing, also known as composite costing, is a type of accounting method used when goods are sold that contain several other processed parts, and these parts are costed differently. Just as the final product needs a cost associated with it, so do each of the parts created by other processes

Explanation:

Answer 2

In this question, we are required to tell that electricity generating company should employ which type of costing.

• Option B is correct i.e. Operating Costing
• Electricity generating companies should employ operating costing.
• Operating costs are the ongoing expense incurred from the normal day-to-day running of the business.
• Operating costs include both the cost of goods sold and other operating expenses.
• In unit costing company measure both fixed and variable cost.
• Process costing is a method of costing used mainly in manufacturing where units are continuously mass-produced through one or more processes.
• Multiple costing is a type of accounting method used when goods are sold that contain several other processed parts, and these parts are costed differently

PROJECT CODE #SPJ3