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martisue
Feb 17, 2010, 11:48 AM
Thompson company estimates that total factory overhead costs will be $500k for the year. Direct labor hours are estimated to be $200k. For Thompson Company(a) determine the predeterimined factory overhead rate,(b) determine the amount of overhead applied

morgaine300
Feb 19, 2010, 05:35 PM
The predetermined overheard rate is:

\text{\frac{estimated\ annual\ overhead\ costs}{annual\ estimated\ activity\ base}}

Once you have that rate, it will be used for the entire year. To apply, you multiply your rate by actual activity base for that month.