How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

Question

Quizplus · Accepted Answer

The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base. This rate is then used to allocate manufacturing overhead costs to individual products or jobs based on their usage of the allocation base. It is important to use estimated amounts for both overhead costs and allocation base in order to set a rate that accurately reflects expected costs and usage.

How Do You Calculate the Predetermined Manufacturing Overhead Rate Used