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Predetermined overhead rate
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Showers Company estimates the following overhead costs for the coming year: Equipment depreciation $150,000 Equipment maintenance 50,000 Supervisory salaries 20,000 Factory rent 200,000 Total $420,000 Showers is also budgeting $600,000 in direct labor costs and 14,000 machine hours for the...
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Hai all, I want to know, why firms use a predetermined overhead rate to alocate the overhead to a job or a product? Just for my knowledge only. Thanks
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I have a homework question where a company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine hours in Dept. B. At the beginning of the year, the company made the following estimates: ...
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