Those firms producing similar products or services
process-costing accounting system
a company’s products/ services are unique, they require
Job-order accounting system
A normal job-order costing system is a system that uses:
Actual costs for direct materials and direct labor and estimated costs for overhead
Using normal costing requires that
Actual overhead costs are not assigned directly to jobs
Using normal costing, which costs never enter the work-in-process account?
Actual Overhead
determines unit cost by adding actual direct materials, actual direct labor, and estimated overhead.
Normal cost system
calculated at the beginning of the year by dividing the total estimated annual overhead by the total estimated level of associated activity or cost driver
predetermined overhead rate
Costs are tracked throughout the year in the overhead account
Costs are computed throughout the year and added to actual direct materials and actual direct labor to get total product cost.
single overhead rate has been explained by dividing all estimated overhead for a factory by the estimated activity level across the entire factory
plant