According to the Matching Principle, Short-Term Needs for Funds Should

question 29

True/False

According to the matching principle, short-term needs for funds should be financed by short-term sources of funds; long-term need for funds should be financed by long-term sources of funds.

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Definitions:

Variable Overhead Rate

This rate reflects the cost of variable overhead allocated to each unit of production, based on an activity such as direct labor hours.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process or providing a service.

Fixed Manufacturing Overhead

Costs that do not change with the level of manufacturing output, including salaries of managers and depreciation of factory equipment.

Direct Labor-Hours

The total hours of labor directly involved in producing goods or providing services.