1. In a job-order cost system, what would back up the balance in the Work in...

1. In a job-order cost system, what would back up the balance in the Work in Process account?

2. What are the differences between actual costing system and normal costing system?

Solutions

Expert Solution

Answer for 1)

In job order costing the balance in the work in process account will be transferred to Finished goods accounts for which the the costs of direct materials,direct labour and other overheads of remaining portion will be added.

Answer for 2)

1)The primary difference of actual and normal costing system is in actual costing system the actual costs of direct materials, direct labour and manufacturing Overheads is recorded as cost but when it comes to normal costing system the predetermined rates are used for mostly manufacturing overhead as it easy to determine the actual costs of material and labor which is not in the case of manufacturing overhead.

2)The second major difference is that in normal costing system the variation of overhead costs is almost negligable as it uses predetermined rate but when it comes to actual costing system the rate may vary due to price hikes and drops in the overheads used.

ekkarill92 answered 1 year ago

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