If the predetermined overhead rate on is based on the estimated level of activity for the current period,then products will be charged only for the capacity that they use and will not be charged for the capacity they don't use.

Question

Quizplus · Accepted Answer

The predetermined overhead rate allocates overhead based on the estimated level of activity, not actual usage, potentially charging products for capacity they do not use.

If the Predetermined Overhead Rate on Is Based on the Estimated