A process costing system and a job-order costing system both use a predetermined overhead rate to apply estimated manufacturing overhead costs to work in process.

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Both process costing and job-order costing systems use a predetermined overhead rate to allocate overhead costs to the products being manufactured. This rate is usually calculated by dividing estimated total overhead costs by an estimated level of activity, such as machine-hours or labor-hours, for the coming period.

A Process Costing System and a Job-Order Costing System Both