Some of the Reasons an Organization May Decide to Buy

question 24

True/False

Some of the reasons an organization may decide to buy rather than make are: greater supply assurance,stringent quality requirements,and very small quantity requirements.

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Definitions:

Direct Labor

The work of factory employees that can be directly traced to the individual units of product.

Factory Overhead Applied

The allocation of estimated manufacturing overhead costs to individual units of production based on a predetermined rate.

Underapplied

A situation where the actual costs are higher than the costs applied or allocated, typically in manufacturing overhead.

Job Order Cost Accounting

A system used to assign production costs to an individual product or batches of products, typically when each product's design is sufficiently unique.