ECONOMICS

Detailed explanation-1: -Actual costing is the recording of product costs based on three factors. They are the actual cost of materials, the actual cost of labor, and the actual overhead costs incurred. Overhead costs are allocated using the actual quantity of the allocation base experienced during the reporting period.

Detailed explanation-2: -What is actual costing? Actual costing is a cost accounting method that determines the cost of manufactured products. When performing actual costing, businesses often record the actual costs of materials, labor and overhead related to the production process.

Detailed explanation-3: -Examples of cost components are purchase order item price, material, freight, tax, and overhead.

Detailed explanation-4: -The following elements are used to verify a standard cost per unit: Direct materials price standard. Direct materials quantity standard. Direct labour rate standard.