COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs
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Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base
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Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base
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Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.
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Detailed explanation-1: -Answer and Explanation: A predetermined overhead rate is an overhead rate that is estimated by the company at the start of the operating period. Hence, it is computed by dividing the estimated manufacturing overhead cost by the estimated total units of allocation based.
Detailed explanation-2: -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-3: -Answer and Explanation: The answer is a) Estimated total factory overhead costs divided by estimated activity base. The predetermined overhead rate formula is: Predetermined overhead rate = Estimated overhead costs / Estimated allocation base.
Detailed explanation-4: -Which of the following is the correct formula to compute the predetermined overhead rate? Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.
Detailed explanation-5: -The equation for the overhead rate is overhead (or indirect) costs divided by direct costs or whatever you’re measuring. Direct costs typically are direct labor, direct machine costs, or direct material costs-all expressed in dollar amounts.