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Activity-Based Costing
A cost allocation system that first identifies overhead expenses, assigns them to specific activities, and then distributes these costs to various products.
Traditional Costing Method
An accounting method that assigns indirect costs to products based on a predetermined overhead rate, often not reflecting the actual consumption of resources by each product.
Direct Labor-Hours
The total number of hours worked directly on the production of goods.
Overhead Assigned
The process of allocating manufacturing overhead costs to specific products or cost objects based on a predetermined rate or method.
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