ECONOMICS

Detailed explanation-1: -Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred. A process cost system is used when a company manufactures a large volume of unique products.

Detailed explanation-2: -Actual manufacturing overhead costs are the indirect manufacturing costs incurred periodically throughout the year in the production process. Manufacturing overhead applied are the overhead costs added or applied to each job during the production process.

Detailed explanation-3: -Actual overhead costs are not traced to jobs because the very nature of the overhead is indirect, i.e manufacturing overhead comprises of costs that cannot be directly traceable to finished goods or specific jobs. In order to assign them to jobs, they have to be allocated rather than being traced.

Detailed explanation-4: -A normal job-order costing system is a system that uses: Actual costs for direct materials and direct labor and estimated costs for overhead. Actual overhead costs are not assigned directly to jobs.