Question

State whether the statement is True or False:
‘Operating costing is concerned with the ascertainment of operating cost for manufactured tangible product.’

Hint:

Operating costing = service industry costing, not manufacturing.

Answer 1

Operating costing is a method of costing used to ascertain the cost of providing services, not for manufacturing tangible products.
It is applied in transport companies, hospitals, hotels, power houses, and similar service industries.
Its main aim is to determine the cost per unit of service, such as per kilometer, per patient day, or per room night.
Manufactured tangible products are costed using other methods like job costing, batch costing, or process costing — not operating costing.
Therefore, the statement given is False.