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Operation costing is a mix of job costing and process costing, and is used in either of the following situations:
n both cases, you use a mix of job costing and process costing to compile the cost of a product; this mixed costing environment is called operation costing. The job costing element is based on the concept that you can assign costs to specific products, which is the case when something is produced in units of one or in very small quantities. The process costing element is based on the concept that you allocate the cost of producing a large group of products equally to all the products in that group, since they are manufactured in an identical manner.
In short, operation costing is most applicable to the more complex manufacturing environments that require a mix of different types of production processes in order to create goods.
These are recurring expenses in operating the business. The expenses can include property maintenance, taxes, wages, electric bills, telephone bills, ................
Operating cost includes both fixed & variable costs.Fixed cost are overheads which remains same regardless of number products produced and variable cost are materials which can be vary according to how much they produced . ie,Operating Cost = Fixed Cost + Variable cost.
THE EXPENSES WHICH ARE INCURRED FOR THE PROPER RUNNING OF THE BUSINESS
The cost incurred on operations includes
Direct Materials Cost
Direct Labor Cost
FOH
A cost relating to producing a company's goods or services.
Agree with all experts.
Agreed with the answer, Mr. Asim
Operating costs include both fixed costs and variable costs. Fixed costs, such as overhead, remain the same regardless of the number of products produced; variable costs, such as materials, can vary according to how much product is produced.
