4.3 Describe the approaches to evaluating and implementing job costing systems.
1) Actual costing systems are commonly found in practice because the indirect cost information is readily available.
2) Actual costing allocates indirect costs based on the predetermined indirect-cost rates multiplied by the actual quantities of the cost-allocation bases.
3) In the five-step decision-making process which of the following is an element of the last step in the process?
A) evaluate performance
B) choose among alternatives
C) identify uncertainties
D) identify the problems
E) make predictions about the future
4.4 Distinguish between actual and normal costing.
1) The difference between the actual costing and normal costing methods is that actual costing uses a budgeted indirect cost rate while normal costing uses an actual indirect cost rate.
2) Actual costing can also be a method of job costing.
3) Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.
4) At the end of the year, the direct costs traced to jobs using the budgeted rates will equal actual direct costs.
5) For normal costing, even though the budgeted indirect-cost rate is based on estimates, indirect costs are allocated to products based on actual levels of the cost-allocation base.
6) Direct costs are traced the same way for actual costing and normal costing.
7) Managers and accountants gather the information that goes into their cost systems through source documents, which are the original records that support journal entries in an accounting system.