The predetermined overhead application rate based on direct labor hours is computed as:
A)actual total overhead costs divided by actual direct labor hours.
B)estimated total overhead costs divided by estimated direct labor hours.
C)actual total overhead costs divided by estimated direct labor hours.
D)estimated total overhead costs divided by actual direct labor hours.

Question

Quizplus · Accepted Answer

The predetermined overhead application rate is calculated by dividing estimated total overhead costs by estimated direct labor hours to allocate overhead costs to products or job orders.

The Predetermined Overhead Application Rate Based on Direct Labor Hours