A Special Order Occurs When an Existing or New Customer

question 184

True/False

A special order occurs when an existing or new customer places a one off request for a product or service.

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Definitions:

Factory Overhead

Factory overhead, also known as manufacturing overhead, includes all the indirect costs related to manufacturing that cannot be directly attributed to a specific product unit.

Direct Materials

Raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Work In Process

This refers to the goods that are in the middle of the manufacturing process but are not yet complete.

Process Cost System

An accounting method used to track production costs for continuous production processes, allocating costs to units of product.