The predetermined overhead rate is
A) determined on a moving average basis throughout the year.
B) not calculated until actual overhead costs are incurred.
C) determined at the beginning of the year.
D) determined at the end of the current year.

Question

Quizplus · Accepted Answer

The predetermined overhead rate is calculated at the beginning of the year by dividing estimated overhead costs by an estimated activity level. This rate is then used to apply overhead costs to products throughout the year.

The Predetermined Overhead Rate Is