The Pre-determined overhead rate is computed by dividing the total estimated manufacturing overhead by machine hours for the year. And the overhead allocated to different products on the basis of total machine hours used for respective production multiplied with pre-determined overhead rate. The method of pre-determined overhead rate based on machine hours and allocation of overhead on this basis to various products need to be determined.

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Chapter 24, Problem E24.14E

To determine

The Pre-determined overhead rate is computed by dividing the total estimated manufacturing overhead by machine hours for the year. And the overhead allocated to different products on the basis of total machine hours used for respective production multiplied with pre-determined overhead rate.

The method of pre-determined overhead rate based on machine hours and allocation of overhead on this basis to various products need to be determined.

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