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1. Discuss the conditions when it would be preferable to use job-order costing over process costing....

1. Discuss the conditions when it would be preferable to use job-order costing over process costing. 2. Explain under-applied overhead and what dispositions is made for it at the end of a period. 3. Discuss what happens to overhead rates that are based on direct labor when automated equipment replaces direct labor. Would manufacturing overhead increase or decrease? Would the predetermined overhead rate increase of decrease? Defend your answer. 4. Discuss the advantages and disadvantages of utilizing multiple overhead rates versus a plantwide rate.

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Answer #1

1)-JOB ORDER COSTING IS BASICALLY THAT METHOD WHICH IS USED FOR ASSIGNING MANUFACTURING COSTS TO AN INDIVIDUAL PRODUCT OR BATCHES OF PRODUCT IN A LOT.THIS METHOD IS USED WHEN EACH PRODUCT BEING MANUFACTURED IS DIFFERENT FROM THE OTHER PRODUCTS BEING MANUFACTURED OR EACH LOT OF PRODUCTS BEING MANUFACTURED IS DIFFERENT FROM OTHER LOTS OF MANUFACTURED PRODUCTS.THEREFORE IT IS ADVISABLE TO USE IT WHEN THERE ARE DIFFERENT CATEGORIES OF PRODUCTS TO BE MANUFACTURED.

PROCESS COSTING IS EXACTLY DIFFERENT FROM JOB ORDER COSTING BECAUSE IT IS USED WHEN ALMOST IDENTICAL PRODUCTS ARE PRODUCED EITHER INDIVIDUALLY OR IN A LOT.THEREFORE IT IS TO BE USED WHEN SAME OR IDENTICAL CATEGORIES OF PRODUCT IS TO BE PROCESSED.

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