Asked by Aaron Silver on May 09, 2024
Verified
Which of the following is the correct formula to compute the predetermined overhead rate?
A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs
B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base
C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base
D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.
Predetermined Overhead Rate
A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual products based on a certain activity base.
- Grasp the methodology for determining and applying predetermined overhead rates in job costing scenarios.
Verified Answer
CY
chong yik liangMay 16, 2024
Final Answer :
B
Explanation :
The predetermined overhead rate is calculated by dividing the estimated total manufacturing overhead costs by the estimated total units in the allocation base.
Learning Objectives
- Grasp the methodology for determining and applying predetermined overhead rates in job costing scenarios.
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