This post addresses manufacturing overhead as indirect cost.
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Why is manufacturing overhead considered an indirect cost of a unit of product? Are there any situations where this could be considered a direct cost of a unit of product and if so, how?
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The solution provides a detailed discussion explaining why manufacturing overhead is considered an indirect cost of a unit of production and any situations where this could be considered a direct cost of a unit of production.
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Why is manufacturing overhead considered an indirect cost of a unit of product?
Manufacturing overhead is an indirect cost of a unit of production because the manufacturing overhead costs cannot be easily traced to specific units of products. In order to properly assign direct costs, costs are assigned (related) to specific product units, such as quantity of supplies used for certain ...
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