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The RTI approach
Predetermined Overhead Rate
The predetermined overhead rate is calculated before a period begins and is used to allocate overhead costs to products or job orders based on a consistent activity base.
Direct Labour-Hours
The cumulative hours that employees engaged in the production process have worked.
Cost of Goods Manufactured
Total production cost of goods completed during a specific period, including materials, labor, and overhead.
Overapplied Overhead
Occurs when the allocated manufacturing overhead cost is more than the actual overhead incurred during a period.
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