Calculate Predetermined Overhead Rate - Manufacturing Overhead

The video tutorial explains the concept of predetermined overhead rate (POR), detailing how to calculate it using estimated total overhead costs and an allocation base, such as machine hours. It provides an example calculation and demonstrates how to apply the POR to a job using actual data, ensuring accurate job costing.

What is the formula for calculating the predetermined overhead rate?

• Actual total overhead costs divided by actual total base

• Actual total overhead costs divided by estimated total base

• Estimated total overhead costs divided by estimated total base

• Estimated total overhead costs divided by actual total base

In the given example, what is the predetermined overhead rate if the company expects $200,000 in overhead and 100,000 machine hours?

• $2.50 per machine hour

• $3.00 per machine hour

• $2.00 per machine hour

• $1.50 per machine hour

What is the applied overhead for a job that uses 15 machine hours, given a predetermined overhead rate of $2.00 per machine hour?

• $35

• $30

• $25

• $20

How is the applied overhead calculated for a specific job?

• Predetermined overhead rate times estimated allocation base

• Predetermined overhead rate times actual allocation base

• Actual overhead rate times estimated allocation base

• Actual overhead rate times actual allocation base

What additional costs are added to the applied overhead to determine the total job cost?

• Direct material and indirect labor

• Indirect material and indirect labor

• Indirect material and direct labor

• Direct material and direct labor