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Insurance contracts must specify the particular risks being transferred from one party to another.
Direct Labor-Hours
The cumulative working hours of employees directly engaged in manufacturing activities.
Fixed Manufacturing Overhead
Costs in manufacturing that do not change with the level of production, such as salaries of supervisors and rent.
Job-Order Costing System
An accounting method that assigns costs to specific jobs or batches of products, capturing the direct materials, direct labor, and manufacturing overhead for each.
Predetermined Overhead Rate
A rate calculated before a period begins, used to allocate overhead costs to products or job orders based on a certain activity base, such as direct labor hours.
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