In a Service Firm,the Cost Associated with Time That Employees

question 69

True/False

In a service firm,the cost associated with time that employees spend on training,paperwork,and supervision is considered part of manufacturing overhead.Service firms incur many indirect costs that cannot be traced to specific clients or accounts.Examples include the nonbillable time that employees spend on training,paperwork,and supervision.These indirect costs are treated just like manufacturing overhead in a factory.

---

Definitions:

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on the accounting equation; assets and expenses normally have a debit balance, while liabilities, equity, and revenue normally have a credit balance.

Withdrawals

Money taken out from a bank account, or the act of taking out funds or assets from a business by the owner for personal use.

Assets

Resources owned or controlled by a business, expected to bring future economic benefits.