MC 30 What is the predetermined overhead rate?
A. The actual amount of overhead costs incurred during a specific period.
B. The estimated amount of overhead costs to be incurred during a specific period.
C. The actual amount of overhead costs allocated to a specific product.
D. The estimated amount of overhead costs to be allocated to a specific product.
Answer:D
MC 30 What is the predetermined overhead rate?
A. The actual amount of overhead costs incurred during a specific period. B. The estimated amount of overhead costs to be incurred during a specific period. C. The actual amount of overhead costs allocated to a specific product. D. The estimated amount of overhead costs to be allocated to a specific product.
Explanation: The predetermined overhead rate is calculated by dividing the estimated amount of overhead costs to be incurred during a specific period by the estimated amount of the allocation base (such as direct labor hours or machine hours) for the same period. It is used to allocate overhead costs to specific products based on the estimated usage of the allocation base.