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When it comes to choosing among different types of opportunities, most firms tend to be production-oriented and usually think first of diversification.
Predetermined Overhead Rate
A rate calculated before a period begins, used to allocate estimated overhead costs to products or job orders based on a selected activity base.
Direct Labour Hours
The total time workers spend producing goods or delivering services, directly tied to the production output.
Manufacturing Overhead
The indirect costs associated with manufacturing, not directly tied to a specific product, such as maintenance, utilities, and salaries of supervisors.
Overapplied Overhead
A situation where the allocated manufacturing overhead cost is more than the actual overhead cost incurred.
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