Which of the following is the correct formula to compute the predetermined overhead rate? Multiple Choice Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Which of the following is the correct formula to compute the predetermined
Multiple Choice
-
Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total
manufacturing overhead costs -
Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base
-
Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base
-
Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base.
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