When calculating the budgeted overhead rate,the numerator of the fraction is the actual amount of the cost driver.

Question

Quizplus · Accepted Answer

The numerator of the fraction when calculating the budgeted overhead rate is actually the estimated or budgeted amount of indirect overhead costs for the period. The denominator is typically the estimated amount of activity or cost driver that will be used to allocate the overhead costs to products or services. So, the numerator is not the actual amount of the cost driver but rather an estimation of the indirect costs for the period.

When Calculating the Budgeted Overhead Rate,the Numerator of the Fraction