If a Company Plans to Continue Business into the Future

question 45

True/False

If a company plans to continue business into the future, closing entries are not required.

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Definitions:

Direct Labor-Hours

The total hours worked directly on the production of goods, used as a basis for allocating labor costs to products.

Departmental Predetermined Rates

Specific overhead rates calculated for each department within a company, used to allocate indirect costs more accurately.

Machine-Hours

A measure of the total time that machines are operated within a specific period, used for allocating manufacturing overhead costs to products.

Manufacturing Overhead

The indirect costs related to manufacturing that cannot be directly tied to a specific product, including costs of maintenance, electricity, and equipment depreciation.