0
Explain how shaving 5 percent off the estimated direct labor-hours in the base for the predetermined overhead rate usually results in a big boost in net operating income at the end of the fiscal year.?
Wiki User
∙ 13y ago
You want someone to take your econ exam for you?
that is managerial accounting
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What are the advantages of using predetermined overhead rates?
The benefits of using predetermined overhead rates is that budgeting and allocation of cash flows become easier. It also helps the firm to conserve resources to stay within a budget.
Why you charge production at pre determined factory overhead rate?
The predetermined factory overhead rate is the cost associated with all products produced by the company. This helps the company easily assign cost.
Why does it make sense for unprofitable firms to stay in business?
Sometimes an unprofitable firm will have a business unit that is profitable. Operating the other units will help cover the overhead costs, allowing the business to take care of their bills.
Is commission manufacturing overhead cost?
No -- commission is Sales overhead cost.
What kind of overhead allocation method results in the use of more than one overhead rate?
One method that accounts for all the overhead in a plant, for example, can be included in a single kind of overhead allocation.
How do you calculate predetermined overhead?
You take estimated overhead divided by the estimated level of production activity. It is used to assign overhead to production.
What journal entries are used for predetermined overhead?
It is used for operating the deals .
What is the predetermined cost?
Predetermined rate is overhead rate allocated to product cost to find out the full product cost and it is an estimated rate based on total expected overhead on normal capacity divided by some machine hours or direct labor hours etc.
When is the Predetermined overhead rate usually calculated?
The predetermined overhead rate used to apply overhead to finished jobs is determined before the period begins.
How do you compute predetermined overhead rate as a percentage of direct labor costs and direct labor hours?
Predetermined overhead rate based on direct labor cost = Budgeted overhead cost / direct labor cost / 100 Predetermined overhead rate based on direct labor cost = budgeted overhead cost / direct labor hours.
What is the advantage of using a predetermined overhead application rate?
RUNOVER
Definition of a predetermined overhead rate?
Predetermined overhead rate is that overhead rate calculated before start of production to allocate overhead costs to units of products by using some ratio in relation to some other cost like material cost or labor cost or labor hours etc.
What are the advantages of using predetermined overhead rates?
The benefits of using predetermined overhead rates is that budgeting and allocation of cash flows become easier. It also helps the firm to conserve resources to stay within a budget.
Why do companies use a predetermined overhead rate rather than actual overhead costs to apply overhead to jobs?
because they have no life, also they predetmined pigs
Does the predetermined overhead rate change in proportion to the change in predicted production Overhead rate 100000 at .10 a unit. Outputs One group- 20000 units one at 300000 one at 400000?
Predetermined overhead rate is calculated according to the normal production capacity of the plant.
How do I compute predetermined overhead rate as a percentage of direct labor costs?
Predetermined overhead rate = Est. total Manuf. Overhead Cost / Est. total amt of allocation base In this case, allocation base would be direct labor (as opposed to machine labor). Hope this helps
How is predetermined overhead rates useful in costing?
It allows you to forecast future costs needed to do business.
