Why Is Planning Important

question 70

Essay

Why is planning important?

Understand the concept of overapplied and underapplied overhead and how it is disposed of in cost accounting.

Calculate predetermined overhead rates and understand their use in cost allocation.

Identify the components of manufacturing costs, including direct materials, direct labor, and factory overhead.

Comprehend the flow and accounting treatment of materials, labor, and overhead in a job order costing system.

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Definitions:

Growing

The process of increasing in size, quantity, value, or strength.

Corporate Angels

Wealthy companies that invest in small startups or entrepreneurs, often for strategic purposes as well as financial return.

Venture

An undertaking that is risky or daring but may lead to profit or success in a business context.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.