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What is a closed system?
Predetermined Overhead Rate
An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, based on a certain activity base.
Machine-Hours
A measure of production output or activity based on the number of hours machines are operated in the manufacturing process.
Job-Order Costing System
An accounting method used to accumulate and assign costs to custom or unique products or jobs.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead to products or job orders, based on estimated costs and activity levels.
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