What is actual costing vs normal costing, and how does it relate to step 5 in the job costing system?

Normal costing uses budgeted indirect-cost rates where’s actual costing method uses an indirect-cost rate calculated at the end of the year. The formula is Budgeted total costs in indirect cost pool / budgeted total quantity of cost allocation base. It is used in step 5 of the job costing system because we must compute the indirect cost rate, hence we must decide if we use normal or actual costing.