How Do You Calculate the Predetermined Manufacturing Overhead Rate Used

question 285

Multiple Choice

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

• A)By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base
• B)By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs
• C)By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base
• D)By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

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Definitions:

Vertical Contracts

Arrangements between companies at different levels in the supply chain, such as manufacturers and retailers, to control the supply and price of products.

Benefits

Advantages or favorable outcomes resulting from specific actions, policies, or circumstances.

Promotional Activities

Efforts designed to inform, persuade, or remind potential buyers about a business's products or services, often to boost sales or brand awareness.

Free Ride

Benefit received without contributing to the cost of its production, often resulting in under-provision of goods or services if too many consumers opt to not pay.