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The first step in creating the pro forma income statement is to:
Machine Hours
A measure of production time, calculated as the total number of hours machines are operated in the production process.
Overhead Assigned
The process of allocating indirect costs, such as utilities or rent, to specific products or departments within a company.
Allocation Base
a criterion or measure used for distributing costs evenly across various departments or products.
Departmental Overhead Rate
The rate used to allocate indirect costs to specific departments, based on their share of the overhead expenses.
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