Differentiate between job costing and process costing and explain how a job costing system works.

• How is job costing different in a service organization?
• Give five examples of manufacturing overhead costs and explain why they are considered indirect costs?
• What is the predetermined overhead allocation rate?
• Provide some examples of an allocation base.
• Explain how manufacturing overhead is allocated to jobs. Why is manufacturing overhead applied to products when product costs are used in making pricing decisions. Discuss the benefits of using a predetermined overhead rate instead of an actual overhead rate.Discuss one advantage and one disadvantage of prorating over-applied or under-applied overhead.