Manufacturing Overhead

The predetermined overhead rate used to apply overhead to finished jobs is determined before the period begins. Are any of the accounting records affected at this point in time?

POHR
=

Estimated total manufacturing overhead cost for the coming period
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Estimated total units in the allocation base for the coming period


Next Step is to apply manufacturing overhead to production....

Overhead applied = POHR × Actual activity

Extra Examples and Practice Problems:
Job Order Costing and Process Costing
Variable Cost Ratio Example
When to Use Process Costing