A Predetermined Overhead Rate Is Calculated by Dividing

question 71

Multiple Choice

A predetermined overhead rate is calculated by dividing:

• A)actual manufacturing overhead cost by estimated total cost driver.
• B)estimated total cost driver by estimated manufacturing overhead cost.
• C)estimated manufacturing overhead cost by actual total cost driver.
• D)estimated manufacturing overhead cost by estimated total cost driver.

---

Definitions:

Profitable Level

The point at which a company's revenues exceed its costs, leading to financial gain or profit.

Minimal Losses

The smallest amount of losses that can be incurred, typically used in the context of minimizing financial or operational losses.

Marginal Revenue

The increase in earnings resulting from the sale of one extra good or service.

Economic Profit

the difference between total revenue and total opportunity costs; a measure of profit beyond the normal return on investment.