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A Facility Built Because of Tax Incentives, Local Content Requirement

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A facility built because of tax incentives, local content requirement, tariff barriers, or high logistics cost to supply the region from elsewhere with the objective to supply the market where it is located is


Definitions:

Overhead Variances

Overhead Variances are differences between the actual overhead incurred and the standard or expected overhead, used to assess the efficiency of overhead cost control.

Fixed Budget Variance

The difference between the actual incurred expenses and the expenses budgeted for a set period, under the assumption of fixed operational conditions.

Standard Costing System

An accounting system that assigns fixed costs for materials, labor, and overhead to the production of goods, facilitating budgeting and performance evaluation.

Direct Labour Hours

The total hours worked by employees directly involved in the manufacturing process, contributing to the transformation of raw materials into finished goods.

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