Briefly Explain the Purpose of the Disclosure Note on Significant

question 131

Essay

Briefly explain the purpose of the disclosure note on significant accounting policies. Provide two examples of what might be found in this note.

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Definitions:

Fixed Manufacturing Overhead

A consistent cost incurred during manufacturing that does not vary with the level of production, such as salaries of managers or rent.

Cooling Coil

A component used in refrigeration and air conditioning systems to transfer heat and cool down air or liquids passing through it.

Predetermined Overhead Rate

A rate calculated by dividing the estimated total manufacturing overhead cost by the estimated job base for a specific period, used to allocate overhead costs to products.

Commercial Refrigerators

Refrigeration equipment designed specifically for commercial use to store perishable goods under controlled temperatures.