Meaning of Operating Costing

It is a method of ascertaining costs of providing or
operating a service. This method of costing is applied by those undertakings which
provide services rather than production of commodities. The emphasis under operating
costing is on the ascertainment of cost of services rather than on the cost of
manufacturing a product. This costing method is usually made use of by transport
companies, gas and water works departments, electricity supply companies, canteens,
hospitals, theatres, schools etc.