Overhead relates to production operations as a whole

Overhead relates to production operations as a whole - To...

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Overhead relates to production operations as a whole. To know what “the whole” is, the logical thing is to wait until the end of the year's operations. At that time the company knows all of its costs for the period. As a practical matter, though, managers cannot wait until the end of the year.
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Unformatted text preview: To price products accurately, they need information about product costs of specific jobs completed during the year. Using a predetermined overhead rate enables a cost to be determined for the job immediately....
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