A Spreadsheet Mistake Created an Error That Cost TransAlta $24

question 53

True/False

A spreadsheet mistake created an error that cost TransAlta $24 million because they bought power transmission hedging contracts at higher prices than it would have if the decision had been based on accurate information.

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Definitions:

Direct Materials Costs

The expense of raw materials and components that are directly incorporated into a finished product.

Manufacturing Overhead Applied

The allocation of estimated manufacturing overhead to individual jobs or products based on a predetermined overhead rate.

Total Manufacturing Costs

Sum of all costs directly involved in the production of goods, including raw materials, direct labor, and manufacturing overhead.

Direct Labor Cost

The wages or expenses directly associated with the workers who are physically involved in creating a product or providing a service.