When the activity base used in calculating the predetermined overhead rate is units of output, which of the following also must be known before overhead can be applied to a particular job?
A) Actual overhead incurred during the period
B) Estimated direct labor hours for all jobs during the period
C) Actual units produced for that job
D) Actual units produced for all jobs during the period

Question

Quizplus · Accepted Answer

When the activity base used is units of output, the overhead is applied based on the actual number of units produced for a particular job. Therefore, actual units produced for that job is required to apply overhead to a specific job. Options A, B, and D are not required when the activity base is units of output.

When the Activity Base Used in Calculating the Predetermined Overhead