Can you give us the actual formula for determining the overhead rate and not just the two components without relating them to each other, please? That should then help you give a better explanation of how/why the overhead could be over or underapplied.

Q: What adjustment is made for underapplied overhead on the schedule of CoGS? What adjustment is made…

A: Underapplied overhead is added to cost of goods sold thus increases the total cost of goods sold.

Q: not easily traceable and are allocated to a cost object u not abbreviate or add any extra spacing in…

A: Direct costs refer to those expenses which can be directly related to a product or a service.

Q: Describe three alternative ways to dispose of under- or overallocated overhead costs.

A: Overhead Cost: The cost of indirect material, labor, and other expenses is the overhead cost. This…

Q: Define the term external failure costs.

A: Quality costs: Quality costs are costs that are incurred to avoid, identify and eliminate defects…

Process Costing

Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.  

Job Costing

Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.

ABC Costing

Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.