How to calculate Predetermined Overhead Rate easily?
Predetermined Overhead Rate for machine hours is calculated by dividing estimated manufacturing overhead cost total by estimated machine hours. Departmentalization of factory overhead means dividing plant into parts or sections called cost centers to which expenses are charged. From the accounting point of view, the division of plant into separate segment. According to some logical form provides more accurate results and better control. More accurate costing of jobs and products is possible. Each department will be charged with overhead rates which are reasonable for that department. Job or product going…
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