Examlex
How does the principle of diversification work?
Predetermined Overhead Rate
The rate used to assign overhead costs to products or services based on a predetermined formula.
Fixed Component
The portion of total costs that remains constant, regardless of changes in activity level.
Variable Overhead
Costs of production that vary with the level of manufacturing activity or output, such as utilities and commissions, as opposed to fixed overhead costs.
Rate Variance
The difference between the actual rate paid for inputs and the standard rate expected, often related to labor or manufacturing overhead.
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