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What is the main difference between operating costing and operation costing?
- a)Operating costing is used for services, while operation costing is used for production of commodities.
- b)Operating costing determines the cost per unit of service rendered, while operation costing determines the total cost and unit cost of each operation.
- c)Operating costing considers fixed and variable costs, while operation costing only considers variable costs.
- d)There is no difference between operating costing and operation costing.
Correct answer is option 'B'. Can you explain this answer?
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What is the main difference between operating costing and operation co...
The main difference between operating costing and operation costing is that operating costing is used for services, such as transport, supply service, welfare service, etc., while operation costing is used for the production of commodities. Operating costing focuses on determining the cost per unit of service rendered, taking into account both fixed and variable costs. On the other hand, operation costing is used to determine the total cost and unit cost of each operation, specifically focusing on variable costs.
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What is the main difference between operating costing and operation co...
Introduction:
Operating costing and operation costing are two different costing systems used in accounting to determine the cost of providing services or producing goods. The main difference between the two lies in their focus and the type of cost information they provide.
Detailed Explanation:
1. Definition:
- Operating costing involves determining the cost per unit of service rendered.
- Operation costing, on the other hand, determines the total cost and unit cost of each operation.
2. Focus:
- Operating costing is primarily used for service-based industries, such as airlines, hospitals, hotels, etc.
- Operation costing, on the other hand, is used for the production of commodities, such as manufacturing companies.
3. Cost Determination:
- Operating costing determines the cost per unit of service rendered. It takes into account both fixed and variable costs associated with providing the service.
- Operation costing, however, determines the total cost and unit cost of each operation involved in the production process. It typically considers only variable costs associated with the operation.
4. Unit Cost Calculation:
- In operating costing, the focus is on determining the cost per unit of service rendered. This is done by dividing the total cost of providing the service by the number of units of service provided.
- In operation costing, the unit cost calculation is done for each operation involved in the production process. The total cost of each operation is divided by the number of units produced in that operation.
Conclusion:
In conclusion, the main difference between operating costing and operation costing lies in their focus and the type of cost information they provide. Operating costing is used for service-based industries and determines the cost per unit of service rendered, while operation costing is used for production-based industries and determines the total cost and unit cost of each operation involved in the production process.
Operating costing and operation costing are two different costing systems used in accounting to determine the cost of providing services or producing goods. The main difference between the two lies in their focus and the type of cost information they provide.
Detailed Explanation:
1. Definition:
- Operating costing involves determining the cost per unit of service rendered.
- Operation costing, on the other hand, determines the total cost and unit cost of each operation.
2. Focus:
- Operating costing is primarily used for service-based industries, such as airlines, hospitals, hotels, etc.
- Operation costing, on the other hand, is used for the production of commodities, such as manufacturing companies.
3. Cost Determination:
- Operating costing determines the cost per unit of service rendered. It takes into account both fixed and variable costs associated with providing the service.
- Operation costing, however, determines the total cost and unit cost of each operation involved in the production process. It typically considers only variable costs associated with the operation.
4. Unit Cost Calculation:
- In operating costing, the focus is on determining the cost per unit of service rendered. This is done by dividing the total cost of providing the service by the number of units of service provided.
- In operation costing, the unit cost calculation is done for each operation involved in the production process. The total cost of each operation is divided by the number of units produced in that operation.
Conclusion:
In conclusion, the main difference between operating costing and operation costing lies in their focus and the type of cost information they provide. Operating costing is used for service-based industries and determines the cost per unit of service rendered, while operation costing is used for production-based industries and determines the total cost and unit cost of each operation involved in the production process.
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What is the main difference between operating costing and operation costing?a)Operating costing is used for services, while operation costing is used for production of commodities.b)Operating costing determines the cost per unit of service rendered, while operation costing determines the total cost and unit cost of each operation.c)Operating costing considers fixed and variable costs, while operation costing only considers variable costs.d)There is no difference between operating costing and operation costing.Correct answer is option 'B'. Can you explain this answer?
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What is the main difference between operating costing and operation costing?a)Operating costing is used for services, while operation costing is used for production of commodities.b)Operating costing determines the cost per unit of service rendered, while operation costing determines the total cost and unit cost of each operation.c)Operating costing considers fixed and variable costs, while operation costing only considers variable costs.d)There is no difference between operating costing and operation costing.Correct answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the main difference between operating costing and operation costing?a)Operating costing is used for services, while operation costing is used for production of commodities.b)Operating costing determines the cost per unit of service rendered, while operation costing determines the total cost and unit cost of each operation.c)Operating costing considers fixed and variable costs, while operation costing only considers variable costs.d)There is no difference between operating costing and operation costing.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the main difference between operating costing and operation costing?a)Operating costing is used for services, while operation costing is used for production of commodities.b)Operating costing determines the cost per unit of service rendered, while operation costing determines the total cost and unit cost of each operation.c)Operating costing considers fixed and variable costs, while operation costing only considers variable costs.d)There is no difference between operating costing and operation costing.Correct answer is option 'B'. Can you explain this answer?.
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