Which of the following is the correct formula to compute the predetermined overhead rate? a. Estimated total manufacturing overhead costs divided by actual total units in the allocation base. b. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base. d. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter4: Job-order Costing And Overhead Application
Section: Chapter Questions
Problem 4MCQ: The predetermined overhead rate equals a. actual overhead divided by actual activity level for a...
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Which of the following is the correct formula to compute the predetermined overhead rate?
a. Estimated total manufacturing overhead costs divided by actual total units in the allocation base.
b. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.
C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base.
O d. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.
Transcribed Image Text:Which of the following is the correct formula to compute the predetermined overhead rate? a. Estimated total manufacturing overhead costs divided by actual total units in the allocation base. b. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base. O d. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.
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