ACCT 002 Lecture 8: Acct_2_-_Class_8

• School: College of The Sequoias
• Department: Accounting (ACCT)
• Course: ACCT 002
• Professor: cooper

Document Summary

For manufacturing firms, unit costs are essential for. For service firms, unit costs are used to determine. Job-order costing : firms operating in job-order industries produce a wide variety of services or products that are quite distinct from each other. Process costing: firms producing identical products or services can use a process-costing accounting system. In normal costing, overhead must be estimated and applied to output. Three-step process: calculate the predetermined overhead rate, apply overhead to production, reconcile applied overhead with actual overhead and allocate difference to cogs, At the beginning of the year, argus company estimated the following costs: Argus uses normal costing and applies overhead on the basis of direct labour cost. For the month of february, direct labour cost was ,000: calculate the predetermined overhead rate for the year, calculate the overhead applied to production in february. Overhead rate = estimated annual overhead / estimated annual activity level.