What Is Contract Manufacturing, and What Are the Ways in Which

question 72

Essay

What is contract manufacturing, and what are the ways in which international firms employ contract manufacturing?

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Overapplied

A situation in cost accounting where the applied manufacturing overhead cost is more than the actual overhead incurred.

Underapplied

A term often used in cost accounting to denote when the allocated overhead or indirect costs are less than the actual overhead incurred.

Raw Materials

Basic materials used in the production process that are transformed into finished goods.