The Calculation for the Predetermined Overhead Rate Is

question 82

Multiple Choice

The calculation for the predetermined overhead rate is

• A)estimated overhead cost times the estimated level of the allocation base.
• B)estimated overhead cost divided by the estimated level of the allocation base.
• C)estimated level of the allocation base divided by the estimated overhead cost.
• D)estimated overhead cost minus the actual overhead cost.

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Definitions:

Operating Expenses

Costs associated with running a company's core business activities but not directly tied to production.

Cost Of Goods Sold

The total of all costs used to create a product or service, which has been sold.

Beginning Inventory

The total worth of a company's inventory at the beginning of a financial period.

Purchases

Items bought or acquired by a company for various purposes, primarily for resale in the course of business.