Which of the following is the formula to calculate the predetermined factory overhead rate?
A) estimated total factory overhead costs divided by estimated activity base
B) actual total factory overhead costs divided by estimated activity base
C) estimated total factory overhead costs divided by actual activity base
D) actual total factory overhead costs divided by actual activity base

Question

Quizplus · Accepted Answer

The formula to calculate the predetermined factory overhead rate is estimated total factory overhead costs divided by estimated activity base. Predicting the amount of factory overhead that will be incurred during the production process allows companies to estimate the total cost of producing goods or providing services. The estimated activity base is typically the number of units produced, the number of direct labor hours worked, or the number of machine hours used.

Which of the Following Is the Formula to Calculate the Predetermined