The two key items in determining the budgeted factory overhead application rate are total budgeted factory overhead costs and ________.

Question

Quizplus · Accepted Answer

The budgeted factory overhead application rate is calculated by dividing the total budgeted factory overhead costs by the budgeted amount of cost driver. Cost driver is the factor or activity that causes, or drives, the incurrence of factory overhead costs. For example, machine hours or direct labor hours could be the cost driver for calculating the factory overhead rate.

The Two Key Items in Determining the Budgeted Factory Overhead