Why would a company uses a predetermined overhead application rate in producing custom-built things

This is the way to go.
The price has to be reached as quickly as possible.
It is all part of the budgeting system.
This is the measure used.
Subsequently , I am sure the actual overheads are measured and if the original figures were detrimental they are adjusted
Accordingly in the future.
In short for time saving it is the convenient way to go.