Some Costs Are Treated as Indirect Because It Is Too

question 19

True/False

Some costs are treated as indirect because it is too difficult or costly to trace them directly to the cost object.

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Definitions:

Underapplied Manufacturing Overhead

Occurs when the allocated manufacturing overhead costs are less than the actual overhead costs incurred, resulting in a cost variance.

Prorated

Dividing or allocating amounts proportionally based on specific metrics or criteria, often used in billing and cost sharing.

Overapplied Manufacturing Overhead

A situation where the allocated manufacturing overhead cost is greater than the actual overhead incurred.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold to customers.