The allocation base in the predetermined overhead rate must drive the overhead cost in order to improve job cost accuracy. Cost drivers are what cause overhead costs.
"Job costing" is a type of accounting that allows for uniform reporting of profitability by work and tracks costs and receipts by "job."
The cost of manufacturing each product is calculated using the job order costing approach.
This costing method is often applied when the producer must calculate the cost of carrying out a certain job while creating a number of unique things.
Job order costing can be used by enterprises in the white-collar sector of the economy, such as law firms, accounting firms, and private investment firms, to handle specific client accounts.
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