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Define the treadmill of production.
Traditional Costing System
A cost accounting method that assigns overhead costs to products based on a predetermined rate, often ignoring the causal relationship between cost objects and activities.
Activity-Based Costing
A costing methodology that assigns overhead and indirect costs to related products and services based on their usage.
Selling Price
The price at which a product or service is offered to the buyer.
Direct Labor Cost
The total cost of all labor directly involved in the production of goods or services.
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