Costing

Question 1

Process Costing

Answer 1

Process costing is a method used by manufacturing companies to determine the cost of production for a specific product or service. The process costing system assigns costs to each process or stage of production in order to calculate the total cost of producing a particular item.

Question 2

Job costing

Answer 2

Job costing is a method of accounting used by companies to determine the cost of producing a specific product or service. This method assigns costs to each job or project based on the actual materials, labor, and overhead expenses incurred during the production process.

Question 3

Plant wide overhead rate

Answer 3

A plant-wide overhead rate is a method used by companies to allocate manufacturing overhead costs to products or services based on a single predetermined overhead rate. This rate is calculated by dividing the total estimated overhead costs for the entire manufacturing plant by the estimated amount of the allocation base.

Question 4

Departmental overhead rates

Answer 4

Departmental overhead rates are a method used by companies to allocate manufacturing overhead costs to products or services based on the specific overhead costs incurred by each department involved in the production process. This method takes into account the fact that different departments may incur different amounts of overhead costs due to their varying production processes.