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Estimated Overhead Cost
The projected costs of indirect materials, labor, and other expenses that are necessary for production but cannot be directly associated with specific product units.
Direct Labour-Hours
A measure of the amount of time workers spend directly manufacturing a product or providing a service.
Traditional Costing System
A traditional costing system allocates factory overhead to products based on volume-related measures such as direct labor hours or machine hours.
Overhead Cost Per Unit
This is the amount of indirect costs allocated to each unit of production, including costs not directly tied to the production like rent and utilities.
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