Question

Operating costing is a .............. of costing.

• A. method
• B. technique
• C. norm
• D. procedure

Hint:

Operating costing is a practical costing method for services.

Answer 1

The Correct Option is A

Operating costing determines the cost of services in service industries. It is a comprehensive costing method, not merely a tool, as it employs systematic procedures for collecting and computing operational cost data. This approach is applicable to sectors such as transportation, healthcare, hospitality, power generation, and analogous enterprises. It facilitates the calculation of costs per service unit, for instance, per kilometer, per meal, per room night, or per patient day. Consequently, operating costing is accurately categorized as a distinct costing method.