Allocating manufacturing overhead costs is done

Question

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Allocating manufacturing overhead costs is done during the period to ensure that the costs are accurately assigned to the products or services produced during that period. It involves identifying and accumulating both the variable and fixed manufacturing overhead costs incurred and then assigning them to the products or services using an appropriate allocation base, such as direct labor hours, machine hours, or units produced. This process helps to determine the true cost of producing each product or service and is essential for making informed decisions about pricing, production levels, and profitability.

Allocating Manufacturing Overhead Costs Is Done