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What is the "fraud triangle"?
Total Manufacturing Costs
The sum of all costs directly involved in the production of a product, including direct labor, materials, and manufacturing overhead.
Work in Process Inventory
Items that are in the production process but have not yet been completed or turned into finished goods.
Actual Overhead
The real, incurred costs of running a business, excluding direct labor and direct materials, over a given period.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead costs to products, calculated before the period begins based on an estimate of total costs and activity levels.
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