Traditionally, Overhead Is Allocated Based on Direct Labor Cost or Direct

question 151

True/False

Traditionally, overhead is allocated based on direct labor cost or direct labor hours.

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Definitions:

Baker's Wages

The compensation paid to individuals who are employed to bake goods, usually considered a variable cost in the production process.

Direct Labor

The workforce directly involved in manufacturing goods or providing services, whose wages are considered part of the cost of goods sold or cost of services.

Factory Overhead

The total indirect costs associated with manufacturing, excluding direct labor and direct materials.

Direct Materials

Raw materials that can be directly attributed to the production of finished goods in a manufacturing process.