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What is a normal costing system?

What is a normal costing system?

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تم إضافة السؤال من قبل Mohammed El Tahir Mohammed Yousif , Finance Manager , Factory of Golden Block Company for Cement Products
تاريخ النشر: 2018/04/07
Simin Shirazi
من قبل Simin Shirazi , Finance Manager , Mumbai Mobile Creches

Normal costing system is related to cost allocation assign to a product/item. It consists of viz. material cost, direct labour  & factory overhead (i.e. to the extend that can be directly attributed to the product). 

Mohammed El Tahir Mohammed Yousif
من قبل Mohammed El Tahir Mohammed Yousif , Finance Manager , Factory of Golden Block Company for Cement Products

Normal costing is used to value manufactured products with the actual materials costs, the actual direct labor costs, and manufacturing overhead based on a predetermined manufacturing overhead rate. These three costs are referred to as product costs and are used for the cost of goods sold and for inventory valuation.

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