Which of the following is the correct formula to compute the predetermined overhead rate?
A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs
B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base
C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base
D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.
Correct Answer:
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