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By definition, costs classified as overhead are consumed in basically the same manner regardless of the process involved.

TRUE OR FALSE?

User RippeR
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Final answer:

The statement is true. Overhead costs are incurred in the same manner regardless of the process involved, and they are spread out over the quantity of output produced.

Step-by-step explanation:

The statement 'By definition, costs classified as overhead are consumed in basically the same manner regardless of the process involved' is TRUE.

Overhead costs are fixed costs that do not change regardless of the level of production. Examples of overhead costs include rent, machinery expenses, research and development costs, and advertising expenses.

These costs are incurred regardless of the specific process involved and are spread out over the total quantity of output produced, resulting in average fixed cost. 'Spreading the overhead' means allocating the fixed costs evenly over the quantity of output produced.

User Subtleseeker
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