(Appendix 5A)Basing predetermined overhead rate on capacity will almost certainly result in overapplied overhead.

Name: (Appendix 5A)Basing predetermined overhead rate on capacity will almost certainly result in overapplied overhead.
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Basing the predetermined overhead rate on capacity can lead to underapplied overhead if actual production is less than capacity, as fixed costs are spread over a larger number of units than actually produced.

(Appendix 5A)Basing Predetermined Overhead Rate on Capacity Will Almost Certainly