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prathit Barot
on Nov 19, 2024

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The formula for computing the predetermined overhead rate is:Predetermined overhead rate = Estimated total amount of the allocation base÷ Estimated total manufacturing overhead cost

Predetermined Overhead Rate

A rate estimated before a period begins, used to allocate overhead costs to products or job orders based on a chosen activity base.

Allocation Base

A measure of activity such as direct labor-hours or machine-hours that is used to assign costs to cost objects.

Manufacturing Overhead Cost

All manufacturing costs that are not directly associated with the production of a product, including indirect materials, indirect labor, and other expenses.

  • Acquire insight into the determination and application of predetermined overhead rates in the realm of job costing.
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JD
Jonathan DominguezNov 20, 2024
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