Service firms develop a predetermined rate for some costs.What is this rate called?

Question

Quizplus · Accepted Answer

The predetermined rate for some costs in service firms is called the indirect cost allocation rate. This rate is used to allocate indirect costs to products or services based on a predetermined formula, such as a percentage of labor costs or machine hours. It is important for service firms to develop an accurate indirect cost allocation rate to ensure that they are pricing their products and services appropriately and covering all of their costs.

Service Firms Develop a Predetermined Rate for Some Costs