# ECONOMICS

## COST ACCOUNTING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by estimated annual operating activity, expressed as:
 A direct labor cost. B direct labor hours. C machine hours. D Any of the above.
Explanation:

Detailed explanation-1: -The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as: direct labor cost.

Detailed explanation-2: -You can calculate predetermined overhead rate by dividing the manufacturing overhead cost by the activity driver. For example, if the activity driver was machine-hours, then you would divide overhead costs by the estimated number of machine hours.

Detailed explanation-3: -Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costsPredetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base.

Detailed explanation-4: -Manufacturing Overhead Formula To get a percentage, divide by your monthly sales and multiply that number by 100. Here’s the manufacturing overhead equation: Manufacturing Overhead Costs / Number of Sales x 100 = Percentage.

Detailed explanation-5: -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.

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