Question

predetermined overhead rate includes: Multiple Choice estimated total manufacturing overhead cost in the numerator. only the fixed portion of the estimated manufacturing overhead cost in the numerator. only the variable portion of the estimated manufacturing overhead cost in the numerator. estimated total manufacturing overhead cost in the denominator.

Answer 1

Answer:

estimated total manufacturing overhead cost in the numerator.

Explanation:

Predetermined overhead rate is calculated to apply manufacturing overhead to products. It is usually calculated before production begins. Using estimated overhead cost and the estimated allocation base

The formula is:

Predetermined over head rate = (estimated total manufacturing overhead cost) ÷ (estimated total amount of the allocation base)

The allocation base are the units that are considered in calculating predetermined overhead rate. For example labour hours can be used, machine hours, and direct materials