11-25 Adjusting Interest Rates,fees,and Other Terms Upward for Increasing Amounts

question 38

True/False

11-25 Adjusting interest rates,fees,and other terms upward for increasing amounts of default risk is a way to attempt to realize the expected return on the loan.

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Definitions:

Overhead Allocation Base

A measure used to distribute overhead costs among various products or service units within a business.

Machine Hours

A measure of the amount of time machines are operated in the production process, commonly used as an allocation base for assigning overhead costs.

Indirect Labor

Labor costs attributed to anything other than the direct manufacturing of goods or provision of services, such as maintenance, supervision, and administrative tasks.

Factory Utilities

Expenses incurred for electricity, gas, water, and sewage services used in the operation of a manufacturing plant or factory.