ECONOMICS

Detailed explanation-1: -An employee’s job cost rate is the rate at which you want to cost the employee’s labor to the projects on which the employee works. An employee’s job cost rate may or may not be the same as the employee’s payrate.

Detailed explanation-2: -To calculate the overhead rate, divide the indirect costs by the direct costs and multiply by 100. If your overhead rate is 20%, it means the business spends 20% of its revenue on producing a good or providing services. A lower overhead rate indicates efficiency and more profits.

Detailed explanation-3: -Job costing is used to accumulate costs at a small-unit level. For example, job costing is appropriate for deriving the cost of constructing a custom machine, designing a software program, constructing a building, or manufacturing a small batch of products.