Volume-based rates are appropriate in situations where the incurrence of factory overhead is related to a single, common cost driver.
A volume-based totally allocation is an allocation of manufacturing facility overhead fees based on a unit of pastime, in preference to a cost. Examples of such allocation bases are the number of rectangular pictures used, the wide variety of hard work hours used, the variety of gadget hours used, and the number of devices produced.
Volume-primarily based fee drivers assign costs via the run sports simplest. the alternative sports are not noted for costing purposes due to the fact that may not be associated with the quantity of output. Ordering charges are a terrific example.
Volume settlement manner is a settlement of carriage that provides for the carriage of a specific quantity of products in a chain of shipments in the course of an agreed period of time. The specification of the quantity may consist of a minimum, a maximum, or a certain variety.
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