You Are Trying to Explain Debit and Credit Memos That

question 83

Essay

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

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Definitions:

Direct Labor-hour

A measure of the work time spent by employees who are directly involved in the manufacturing process of a product.

Predetermined Overhead Rate

An estimated rate used to assign overhead costs to products or job orders, based on a pre-established formula or basis.

Fixed Manufacturing Overhead

Regular, static expenses associated with operating a manufacturing facility, such as rent, utilities, and salaries, that do not vary with the level of production.

Direct Labor-hours

Direct labor-hours are the total hours worked by employees directly involved in the manufacturing process, used as a measure for allocating labor costs to products.