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Overhead Rate
The total of indirect costs of production compared to a base activity measure, like labor hours, used to assign costs to products.
Manufacturing Overhead
These are indirect factory-related costs that are incurred when producing a product, such as utility costs, depreciation, and salaries of supervisors.
Direct Labor-Hours
Direct labor-hours refer to the total hours worked by employees directly involved in the production process.
Traditional Costing
An accounting method that applies indirect costs to products based on a predetermined overhead rate.
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