Concept explainers
Concept introduction:
Traditional costing systems use predetermined
Predetermined Overhead allocation rate:
The Predetermined Overhead allocation rate is used to allocate the manufacturing overhead over the jobs. Predetermined Overhead allocation rate is calculated by dividing the Total Estimated overhead cost by the Total Estimated allocation base.
The formula to calculate the Predetermined Overhead allocation rate is as follows:
To choose:
The Correct option which is volume based allocation measure
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Managerial Accounting
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