When Deciding Whether to Accept a Special Order, Managers Need

question 188

True/False

When deciding whether to accept a special order, managers need not consider whether they have available excess capacity.

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Definitions:

Direct Labor-Hours

A measure of the labor time spent by workers who directly contribute to the manufacturing or creation of products.

Traditional Costing

A costing method that allocates overhead costs based on a single predetermined rate.

Overhead Applied

The amount of overhead costs allocated to products or job orders based on the predetermined overhead rate.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or projects based on their use of activities.