
Concept explainers
Predetermined
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:
1. Total Indirect Cost
To determine: The Indirect cost in total and per unit allocated on the basis of single plant wide overhead allocation rate.
2. Predetermined Overhead allocation rate:
To determine: The Predetermined Overhead allocation rate for each activity
3. Activity based cost per unit:
To determine: The Activity based cost per unit for each product using the Predetermined Overhead allocation rate for each activity
4. Comparison Activity based cost per unit:
To show: The comparison Activity based cost per unit under both methods:

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Chapter 24 Solutions
Horngren's Accounting: The Managerial Chapters, Student Value Edition (12th Edition)
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