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Testing Prototype
The process of evaluating the initial example of a product to assess its functionality, design, and performance before mass production.
Batch-Level Activity
Costs or activities that are incurred every time a batch is produced, regardless of the size of the batch; part of activity-based costing.
Traditional Costing
A costing method that allocates factory overhead to products based on volume-related measures, such as labor hours or machine hours.
Predetermined Overhead Rate
A rate calculated before a period begins, used to allocate estimated manufacturing overhead costs to individual units of product based on a chosen activity base.
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