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William, aged 59, has been employed by your firm for more than 26 years, and has continually received above-average evaluations. Just before his 27 th anniversary with the firm, you are ordered by your superior, the HR Manager, to tell him that his employment with the firm is terminated immediately. Given the facts, as presented, the issues most likely to be raised are:
Overhead Variances
The difference between actual overhead costs incurred and the standard or budgeted overhead costs.
Variable Overhead
The indirect expenses that fluctuate with the level of production activity, such as utilities for the manufacturing plant.
Overhead Absorption Rate
Budgeted overhead divided by budgeted volume. Also called overhead application rate.
Direct Labor Hours
The total hours worked by employees directly involved in the manufacturing process.
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