If a part is too small or insignificant to be considered a direct material then it becomes an indirect material, and its cost is included in A cost system would be used by a company that makes custom, made-to-order wedding cakes. As the number of units produced increases, a fixed cost has declining costs per unit. As the number of units produced increases, the variable cost per unit In your own words, what does it mean if you have overapplied the factory overhead