Which of the following statement(s)is/are correct? I.A predetermined overhead rate is used to assign estimated overhead costs to work in process.
II)The predetermined overhead rate is calculated by dividing estimated overhead cost by the estimated volume or level of activity.
III)The most common means of allocating overhead costs is to calculate a predetermined overhead rate at the end of the period.
A) I
B) I and III
C) II
D) I and II

Question

Quizplus · Accepted Answer

Because many managerial decisions require product cost information before year-end,rather than waiting until the end of the accounting period when the actual costs are known,companies frequently estimate the amount of overhead cost.The estimated overhead costs are the assigned to products using a predetermined overhead rate that is calculated at the beginning of the period.

Which of the Following Statement(s)is/are Correct? I