Batch costing is best described as:

• A. Identifies costs by department only
• B. Identifies costs by batch as a separate unit
• C. Is used for continuous production with no batches
• D. Assigns costs to a batch as a single unit

Answer: (D)

Batch costing collects all costs for a production run and treats that entire batch as a single cost object. The cost across materials, labour, and overhead is accumulated for the batch, and the cost per unit is then found by dividing the total batch cost by the number of units in that batch. This approach fits the description of assigning costs to a batch as a single unit—the batch itself is the unit of costing, not individual departments or a continuous flow with no batches.

The other ideas don’t fit as well. Costing by department is about tracking costs by functional areas rather than by discrete batches. Continuous production without batches isn’t suited to batch costing at all, since there’s no batch to accumulate costs for. And while another option mentions a batch as a separate unit, the clearest and most precise framing is that the batch functions as a single cost object.