To Plan Variable Overhead Costs Effectively for a Product or Service,managers

question 160

True/False

To plan variable overhead costs effectively for a product or service,managers must eliminate the activities that do not add value to the product or service.

---

Definitions:

Net Operating Income

represents the profit a company makes from its normal business operations, excluding non-operating income and expenses.

Manufacturing Overhead

Indirect factory-related costs that are incurred when a product is manufactured, including costs such as maintenance, supplies, and utilities.

Direct Materials

Raw materials that are directly used in the production of a product and can be directly associated with the finished product.

Administrative Expense

Costs related to the general operation of a business that are not directly tied to production, including salaries of non-production staff, office supplies, and utilities.