Discussion
Now that we have a better understanding of job costing, let's take an example from our childhood entrepreneurial endeavors (neighborhood lawn mowing, babysitting, etc.). Imagine these products and services as businesses, in which you are the manager with several teenagers as your employees.
In your initial post, define the "jobs" in job costing. Explain how you would measure direct materials cost, direct labor cost, and compute predetermined overhead rates.
What are your actual manufacturing overhead costs, and why aren't they traced to jobs, just as direct materials and direct labor are traced to jobs?
Give reasons why overhead might be under-applied or over-applied in a given year.
What factors should be considered in selecting a base to be used in computing the predetermined overhead rate? Why?
When you read the posts submitted by your peers, provide feedback explaining what you would have done differently. Ask for clarification regarding their definitions or decisions that seem unclear to you. Identify areas where you concur with their thinking.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.