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Current costs should not be used to compute either return on investment (ROI)or residual income because current costs are not generally accepted accounting principles (GAAP).
Activity Rate
The predetermined overhead rate used in activity-based costing to assign overhead costs to products or services based on a specific activity.
Machine Setups
The process and associated costs of configuring machinery to produce a specific product or batch of products.
Activity Cost Pool
A compilation of all the costs related to a specific activity or process in cost accounting.
Overhead
The ongoing administrative and operational expenses of a business that are not directly attributable to specific business activities.
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