The estimated amount of overhead per cost driver is referred to as the:
A)predetermined overhead rate
B)accounting cost rate
C)overhead cost pool
D)activity cost pool

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated by estimating the total annual overhead costs and dividing it by the estimated activity level, measured by a cost driver such as direct labor hours, machine hours, or units produced. This results in an estimated overhead cost per unit of activity, which is the predetermined overhead rate.

The Estimated Amount of Overhead Per Cost Driver Is Referred