The Different Points on a Cost Curve Represent Alternative Production

question 162

True/False

The different points on a cost curve represent alternative production possibilities in the same time period.

Determine the total job cost for various jobs.

Calculate the estimated total manufacturing overhead.

Identify the predetermined overhead rate based on machine-hours or direct labor-hours.

Apply overhead to jobs using a plantwide predetermined manufacturing overhead rate.

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Definitions:

Factory Overhead Rate

Factory overhead rate is the method of allocating indirect manufacturing costs, like utilities and rent, to individual units of production based on a specific allocation base.

Assembly Department

a division within a manufacturing plant where components are put together to create a final product.

Direct Labor Hour

The amount of time employees directly involved in manufacturing spend on producing a specific unit of output.

Factory Overhead Rates

Calculated rates used to allocate a factory's indirect costs to products being produced, aiding in determining total production costs.