Thursday, January 17, 2008

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
-------------------------------------------------------------------
Estimated total units in the allocation base for the coming period
The next important step is to apply manufacturing overhead to production that has occurred....

Overhead applied = POHR × Actual activity

Extra Accounting Examples and Practice Problems:

2 comments:

roter789 said...

i have a question about predetermined overhead rates: Explain the types of businesses that use predetermined overhead rates? Why?

roter789 said...

i just have a question regarding predetermined overhead rates. How do some types of businesses use predetermined overhead rates? Explain. Why?

Popular Accounting Problems

The information on this site is for informational purposes only and should not be used as a substitute for the professional advice of an accountant, tax advisor, attorney, or other professional.