Indirect Costs of Doing Business Are Included in Proposals Where

question 101

True/False

Indirect costs of doing business are included in proposals where the customer permits the charging of indirect costs.

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Definitions:

Labor Cost

The total amount of financial compensation paid to employees for their work, including wages, benefits, and taxes.

Variable Manufacturing Overhead

Costs of manufacturing that change with production volume, such as utilities or indirect materials, not fixed over the short term.

Machine-Hours

A measure used in manufacturing to allocate costs to products or job orders based on the number of hours a machine is used.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products, calculated before the production period begins.