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Causal Ordering Is Difficult to Establish,but It Is Considered Valuable

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Causal ordering is difficult to establish,but it is considered valuable because researchers often want to understand


Definitions:

Overhead Assigned

The allocation of indirect costs to specific products or cost objects.

Traditional Costing

A costing methodology that allocates manufacturing overhead costs to products based on a predetermined rate, often volume-based such as labor hours or machine hours.

Direct Labor-Hours

An evaluation of the cumulative hours spent directly in the manufacturing of products.

Total Overhead Applied

The sum of all overhead costs that have been allocated to products or services based on a predetermined overhead rate.

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