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Overhead Allocation Methods
Techniques used to assign indirect costs to products, services, or departments, helping in accurately reflecting production costs.
Overhead Rate
Refers to the cost of running a business that cannot be directly attributed to a specific product or service, often expressed as a percentage of labor or material costs.
Activity-based Costing
A costing method that assigns overhead and indirect costs to specific activities, providing more accurate product costing.
Departmental Overhead Rate
A rate used to allocate overhead costs to specific departments, based on criteria like department size, expenditure, or machine hours used.
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