ECONOMICS

Detailed explanation-1: -In the determination of factory overhead application rates, the numerator of the formula is the: A. B. C. D. Actual factory overhead for the next period Estimated factory overhead for the next period Actual labor hours for the next period Estimated labor hours for the next period 5.

Detailed explanation-2: -To compute the overhead rate, divide your monthly overhead costs by your total monthly sales and multiply it by 100. For example, if your company has $80, 000 in monthly manufacturing overhead and $500, 000 in monthly sales, the overhead percentage would be about 16%.

Detailed explanation-3: -The predetermined overhead rate is set at the beginning of the year and is calculated as the estimated (budgeted) overhead costs for the year divided by the estimated (budgeted) level of activity for the year.

Detailed explanation-4: -The numerator reason refers to the overhead variance caused by the difference between the estimated and actual OH costs for the period. If all manufacturing overhead costs were variable, the production volume variance would always be zero.