actual is the actual cost, normal is estimating
A costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and that allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases.
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
A job order costing system would be more appropriate than a process costing system for manufacturers who use different types of goods throughout the manufacturing process. Process costing is best to you when manufacturing a large amount of the same items.
Over costing and under costing occurs because overhead cost is applied first using some ratio to find out the cost of product before the process of production done and actual cost found.
needs of product costing system
A costing system that traces direct costs to a cost object by using the actual direct-cost rates times the actual quantities of the direct-cost inputs and that allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of the cost-allocation bases.
Standard costing is process of determining the standard price require to produce one unit of product while actual costing system uses the actual prices of manufacturing one unit of product.
A job order costing system would be more appropriate than a process costing system for manufacturers who use different types of goods throughout the manufacturing process. Process costing is best to you when manufacturing a large amount of the same items.
Over costing and under costing occurs because overhead cost is applied first using some ratio to find out the cost of product before the process of production done and actual cost found.
In traditional costing system overheads are spread over volume of production by using spread rate which is called blanket rate or absorption rate while in ABC costing costs are allocated on the bases of actual activity performed in specific cost centers so this is a accurate method for allocating costs according to activity performed and not with just any estimated rates
needs of product costing system
Full costing system
full absorption costing
responsibility costing is a costing which enable us to know which department is responsible for what
features of standard costing
Job order costing is more appropriate than process costing when the product being produced is a custom product
Over costing and under costing of products occurs because it uses a single cost pool for all of the indirect costs. Amounts are estimated because they are determined at the beginning of the accounting period before actual amounts are known.