The Predetermined Overhead Rate Is Calculated as the Estimated Activity

question 41

True/False

The predetermined overhead rate is calculated as the estimated activity in the allocation base divided by the estimated overhead costs.

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Definitions:

FICA

The Federal Insurance Contributions Act tax, which funds Social Security and Medicare, requiring both employer and employee contributions.

Form 941

A quarterly federal tax form filed by employers to report income taxes, social security tax, or Medicare tax withheld from employees' paychecks.

Form 940

A tax form filed by employers with the IRS to report annual Federal Unemployment Tax Act (FUTA) tax.

Employer's Payroll Tax Expense

Taxes that an employer is responsible for paying on behalf of its employees, such as social security and Medicare taxes.