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Machine Hours
Machine hours refer to the total time that a piece of machinery or equipment is operated within a specific period, often used as a basis for allocating manufacturing overhead costs.
Perpetual System
An inventory management system that continuously updates inventory records, reflecting purchases and sales in real-time.
First-In, First-Out
An inventory valuation method that assumes that the first items placed in inventory are the first items sold, ideal for products that are perishable or have a short shelf life.
Predetermined Overhead Rate
A rate calculated before a period begins, based on the estimated overhead costs and estimated activity base, used to allocate overhead costs to products or services.
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