Value Chains Exist in Service-Oriented Companies

question 63

True/False

Value chains exist in service-oriented companies.

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Definitions:

Overhead Application Rate

The overhead application rate is a calculated rate used to apply or allocate overhead costs to individual units of production, based on a specific formula, such as machine hours or labor hours.

Overapplied Overhead

A scenario in which the overhead cost assigned to manufacturing exceeds the actual overhead expenses incurred.

Underapplied Overhead

Occurs when the allocated manufacturing overhead cost is less than the actual overhead cost incurred.

Factory Overhead Account

An accounting category that aggregates all indirect costs associated with the manufacture of goods, such as utilities, maintenance, and salaries of non-direct labor.