When Calculating the Predetermined Manufacturing Overhead Rate, What Is the Correct

question 45

Multiple Choice

When calculating the predetermined manufacturing overhead rate, what is the correct basis of calculation?

• A)Actual overhead costs of the prior year divided by the actual amount of the cost driver or allocation base
• B)Estimated overhead costs divided by the estimated amount of the cost driver or allocation base
• C)Estimated amount of the cost driver divided by the estimated total overhead costs
• D)Estimated overhead costs divided by the number of days in a year

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Definitions:

Competitive Parity

A strategy in which a company sets its level of marketing expenditures to match its competitors, preventing any one competitor from gaining an advantage in the market.

Objective and Task

A method of setting marketing or advertising budgets based on defining specific objectives and estimating the cost of tasks required to achieve them.

All-You-Can-Afford

A marketing or pricing strategy in which the price of a product or service is determined by the customer's ability to pay, often used in non-profit or donation-based scenarios.

Linear Forecast

A prediction method that uses historical data to fit a straight line and project future trends in demand, sales, or other financial indicators.