Page 15 - PowerPoint Presentation
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INVENTORIES




            Measurement










            • Production overheads


                    • Variable overheads


                           • vary according to production

                           • Allocated to cost of inventory based on actual production





                    • Fixed overheads


                           • do not vary according to production levels

                           • Allocated to cost of inventory based on “normal capacity”


                           • Unless actual production greater than normal capacity

                                  • Then allocated based on actual production





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