When is the predetermined overhead rate usually calculated?

Question

Quizplus · Accepted Answer

The predetermined overhead rate is typically calculated at the beginning of the year. This allows for an estimate of the overhead costs that will be incurred during the year, which can then be used to apply overhead to individual jobs or processes. Calculating the rate at the beginning of the month may not provide a sufficient estimate for the full year's overhead costs. Calculating the rate at the end of the year would be too late for it to be useful in applying overhead to jobs or processes throughout the year.

When Is the Predetermined Overhead Rate Usually Calculated