OVERHEAD ABSORPTION Definition

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OVERHEAD ABSORPTION is the term used for describing the transfer of value from a fixed asset such as a building or machine to the final product. In this way the indirect costs of the entity can be assigned to the products or services supplied.

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KAIZEN COSTING means "improvements in small steps" (i.e., continuous improvement). It was developed in Japan by Yashuhiro Monden. Kaizen Costing is applied to product that it already under production.

RISK-FREE RATE is the rate of return available in the market on an investment free of default risk.

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