The predetermined overhead cost driver rate is calculated using ________ overhead costs.
A)actual
B)allocated
C)direct
D)estimated

Question

Quizplus · Accepted Answer

The predetermined overhead cost driver rate is calculated using estimated overhead costs. This is because the rate is calculated at the beginning of the period based on estimated overhead costs for the entire period, which is used to allocate overhead to individual products or services. Actual overhead costs are only known at the end of the period and cannot be used to set the predetermined rate. Allocated overhead costs are the result of applying the predetermined rate to the actual level of the cost driver, while direct overhead costs do not require the use of a predetermined rate.

The Predetermined Overhead Cost Driver Rate Is Calculated Using ________