Predetermined overhead rates are calculated at the end of the accounting period once the actual amount of factory overhead is known.

Question

Quizplus · Accepted Answer

Predetermined overhead rates are calculated before the accounting period based on estimates and are used to allocate overhead costs to products or services. The actual amount of overhead is then compared to the estimated amount, and any differences are accounted for in adjusting entries.

Predetermined Overhead Rates Are Calculated at the End of the Accounting