19Сен
4 4: Compute a Predetermined Overhead Rate and Apply Overhead to Production Business LibreTexts
This means that once a business understands the overhead costs per labor hour or product, it can then set accurate pricing that allows it to make a profit. Hence, one of the major advantages of predetermined overhead rate formula is that it is useful in price setting. As is apparent from both calculations, using different basis will give different results. The price using units of production as a basis is $47,500 while the price using labor hours as a...
