Which of the following mathematical equations is used to calculate a predetermin

Question

Which of the following mathematical equations is used to calculate a predetermined overhead rate?

a. Predetermined Overhead Rate = Estimated Annual Manufacturing Cost / Estimated Quarterly Activity Level

b. Predetermined Overhead Rate = Actual Annual Cost of Goods Sold / Estimated Semi-annual Labor Hours

c. Predetermined Overhead Rate = Estimated Annual Overhead / Actual Annual Activity Level

d. Predetermined Overhead Rate = Actual Annual Overhead / Actual Annual Activity Level

e. Predetermined Overhead Rate = Estimated Annual Overhead / Estimated Annual Activity Level

Explanation / Answer

Answer:

e. Predetermined overhead rate = Estimated Annual Overhead / Estimated Annual Activity Level

All other options are incorrect formula

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