The Greater the Gap Between Current and Desired Capacity the Greater

question 71

True/False

The greater the gap between current and desired capacity the greater the opportunity for profit.

---

Definitions:

Departmental Overhead Rates

The method for allocating overhead costs to specific departments based on departmental activities and cost drivers.

Activity-based Costing

A costing method that identifies the activities that a firm performs and then assigns indirect costs to products based on each product's use of those activities.

Activity Cost Pools

Groupings of individual costs related to a particular activity, used in activity-based costing to allocate costs more accurately.

Direct Labor-hours

The overall hours that workers, who are a part of the manufacturing operations, put in.