Question: Explain how using a predetermined overhead rate can affect profits and losses? That is, why might the predetermined overhead be inaccurate when compared to the

Explain how using a predetermined overhead rate can affect profits and losses? That is, why might the predetermined overhead be inaccurate when compared to the actual results of the activities by the predetermined overhead rate? Your answer should begin by explaining how a predetermined overhead rate is calculated and conclude with why there would be variances from the original estimated values in the calculation (do not disucss any variables except those directly related to the predetermined overhead rate calculation).

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