How to find predetermined overhead rate?
Understand the Problem
The question is asking how to calculate the predetermined overhead rate, which typically involves dividing estimated total manufacturing overhead costs by an estimated allocation base such as total machine hours or total labor hours for a specific period.
Answer
Divide the estimated total manufacturing overhead costs by the estimated total amount of the basis.
The final answer is to divide the estimated total manufacturing overhead costs by the estimated total amount of the basis.
Answer for screen readers
The final answer is to divide the estimated total manufacturing overhead costs by the estimated total amount of the basis.
More Information
A predetermined overhead rate helps allocate overhead costs to products or job orders more accurately and efficiently.
Tips
A common mistake is to use actual overhead costs or activity levels instead of estimates, which can distort cost per unit calculations.
