In Computing the Direct Product Profitability of Manufacturer and Private

question 69

True/False

In computing the direct product profitability of manufacturer and private brands,the retailer should reflect the absence of a promotional allowance on the private brand.

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Definitions:

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, calculated before the costs are actually incurred.

Labor-Hour

A unit of measure representing one hour of work by an employee, often used in costing and budgeting processes.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead allocated, based on the actual input of the allocation base.