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In a Standard Factoring Arrangement, the Factor Buys the Client's

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In a standard factoring arrangement, the factor buys the client's receivables outright, without recourse, as soon as the client creates them, by shipment of goods to customers.


Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products or job orders, calculated before the period begins based on estimated overhead and activity levels.

Machine-Hours

Rephrased: The total hours that machinery is in operation during a specific period, used as a basis for allocating manufacturing overhead costs.

Predetermined Overhead Rate

A rate calculated to estimate the manufacturing overhead cost per unit of production activity, aiding in budgeting and cost control.

Machine-Hours

A measure of production output or activity based on the number of hours machines are operated within a specified period.

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