Several Terms Which Represent Components of a Bookkeeping System Are

question 43

Essay

Several terms which represent components of a bookkeeping system are listed below.For each term,write a brief explanation of how that component is used in a bookkeeping system.Space is provided for your answer immediately below each term.

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Definitions:

Budgeted Costs

Estimated expenses planned in advance for a certain period, serving as a financial guideline.

Departmental Overhead Rates

Rates used to allocate indirect costs to products or services based on the specific department where the costs are incurred.

Plantwide Rate

A single overhead absorption rate used throughout an entire plant or facility, applying the same rate to all cost objects regardless of the department in which they were created.

Overhead Costs

Expenses not directly tied to production but necessary for running the business, such as rent, utilities, and insurance.