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Describe the three typical exit strategies available during the due diligence process.What companies are likely to use each?
Direct Labor-Hours
The total hours worked by employees directly involved in the production process, used as a basis for assigning labor costs to products.
Predetermined Overhead Rate
An estimated overhead rate used to apply manufacturing overhead costs to products, calculated before the costs are actually incurred.
Manufacturing Overhead
All indirect costs associated with the manufacturing process, such as utilities, rent for the manufacturing facility, and salaries for management, distinct from direct labor and direct materials.
Job-Order Costing
An accounting method used to track the costs associated with producing a specific batch of products or providing a particular service, allocating costs to each job individually.
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