Hiring a Company to Run Your Applications on Your Own

question 26

True/False

Hiring a company to run your applications on your own computers is an example of outsourcing.

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Definitions:

Cost Allocated

The amount of indirect costs assigned to cost objects based on certain criteria or cost drivers.

Assembly Department

A section within a manufacturing process where pieces are put together to form a component or a finished product.

Fixed Overhead Rate

A consistent charge that does not fluctuate with the level of output or activity in a given period, used to allocate fixed costs to units of output.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and overhead) in the cost of a product.