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Lease obligations are included in certain leverage ratios because leases:
Predetermined Overhead Rate
An estimated rate used to allocate manufacturing overhead costs to individual products or job orders.
Machine-Hours
The total time machines are operated within a certain period, often used to allocate manufacturing overhead.
Manufacturing Overhead
All manufacturing costs that are not directly associated with the production of goods, such as salaries of supervisors and the cost of factory utilities.
Predetermined Overhead Rate
An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity base.
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