Direct Labor,direct Materials,and Manufacturing Overhead Are All Product Costs

question 22

Essay

Direct labor,direct materials,and manufacturing overhead are all product costs.Why is overhead more difficult to account for than either direct labor or direct materials?

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Definitions:

Perpetual System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Periodic System

An inventory system that updates the inventory levels in the accounting records at specific intervals, typically at the end of an accounting period.

Inventory Turnover

An indicator that reveals the rate at which a business's inventory is sold and restocked throughout a given period, demonstrating the proficiency of inventory control.

Perishable Goods

Items that have a limited shelf life and require timely sale or consumption before they deteriorate, such as food products and flowers.