Predetermined Overhead Rate
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Description
A rate used to charge manufacturing overhead cost to jobs that is established in advance for each period. It is computed by dividing the estimated total manufacturing overhead cost for the period by the estimated total amount of the allocation base for the period.
Concept Prerequisite
Wikipedia Reference
http://en.wikipedia.org/wiki/Predetermined overhead rate
Learning Material
Covered in Topic(s)
| System Design: Job order costing |