Breaches in Product Quality Can Be Extremely Serious, and Can

question 32

True/False

Breaches in product quality can be extremely serious, and can lead to serious injury or even death-particularly in the food industry. For this reason, countries have separate official bodies charged with enforcing food safety guidelines, for example the US Food and Drug Administration (FDA).

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to, utilities, depreciation, and salaries of non-direct labor.

Inventoriable Costs

Direct costs associated with the acquisition or production of goods that are capitalized as inventory and recognized as cost of goods sold when the inventory is sold.

Matching Principle

A fundamental accounting concept that requires expenses to be recorded in the same period as the revenues they helped generate.

Percentage-of-Completion

An accounting method that recognizes revenue and expenses of long-term projects as a percentage of work completed during the period.