EFFORT-EXPENDED METHOD Definition

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EFFORT-EXPENDED METHOD measures the percentage of labor hours incurred to date as compared to estimated total labor hours for each contract.

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PRODUCT COST is cost of inventory on hand, also called Inventoriable Cost. They are assets until the products are sold. Once they are sold, they become expense, i.e. Cost of Good Sold (COGS). All manufacturing costs are product costs, e.g., direct material, direct labor, and factory overhead.

ASSET EARNING POWER is a common profitability measure used to determine the profitability of a business by taking its total earning before taxes and dividing that by total assets.

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