Discussion: Direct Materials And Direct Labor Costs
Direct materials and direct labor costs are traced directly to jobs. Discuss why actual overhead costs are not traced to jobs. Explain why some production costs must be assigned to products through an allocation process.
Why do companies use a predetermined overhead rate rather than actual overhead costs to apply overhead to jobs?
If a company allocates all its overhead costs to jobs, does this guarantee that a profit will be earned for the period? Why or why not?
The response must include a reference list. Using Times New Roman 12 pnt font, double-space, one-inch margins, and APA style of writing and citations.