Even though a job is not completed at year end, manufacturing overhead cost may be applied to that job when a predetermined overhead rate is used.

Question

Quizplus · Accepted Answer

This is because predetermined overhead rate is calculated at the beginning of the year based on estimated manufacturing overhead costs and estimated activity level. This rate is then used to apply overhead costs to jobs throughout the year, regardless of whether the job is completed or not by year end.

Even Though a Job Is Not Completed at Year End