Question: Why do companies apply overhead to jobs using a predetermined (budgeted) overhead rate instead of applying actual overhead to jobs?

Why do companies apply overhead to jobs using a predetermined (budgeted) overhead rate instead of applying actual overhead to jobs?

Step by Step Solution

★★★★★

3.45 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Actual overhead is not known until the end of the accounting perio... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

259-B-M-A-J-O-C (882).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Q:

Dillon Corporation applies manufacturing overhead to jobs using a predetermined overhead rate of 75% of direct labor cost. Any under or overapplied manufacturing overhead cost is closed out to Cost...

Q:

Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?

Q:

Why arent actual manufacturing overhead costs traced to jobs just as direct materials and direct labor costs are traced to jobs?

Q:

11. Why do companies apply overhead to jobs using a predetermined (budgeted) overhead rate instead of applying actual overhead to jobs?

Q:

Mickley Company's predetermined overhead rate is $22.00 per direct labor-hour and its direct labor wage rate is $15.00 per hour. The following information pertains to Job A- 500: Direct materials...

Q:

Acme Imaging Center, a not-for-profit business, is evaluating the purchase of new diagnostic equipment. The equipment, which costs $600,000, has an expected life of five years and an estimated...

Q:

Need urgent 6 Question 2 (11 points) Painter Pros Co. provides painting services to clients. They use a job order costing 9 system and apply overhead to jobs using a predetermined overhead rate based...

Q:

X Time Left:1:36:56 Jodh Singh: Attempt 1 Painter Pros Co. provides painting services to clients. They use a job order costing system and apply overhead to jobs using a predetermined overhead rate...

Q:

San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of...

Q:

this is a final review in the attachment. I know how to do most of it but just want to compare the results. 1. Use the following information to determine the gross margin for Pacific States...

Q:

Today is January 2, 2015, and according to the results of a recent survey, investors expect the annual interest rates for the years 2018 through 2020 to be: Year One-Year Rate 2018 ......... 5.0%...

Q:

For each ratio listed, identify whether the change in ratio value from 2012 to 2013 is usually regarded as favorable orunfavorable. Ratio Ratio 2013 9% 47% 2012 8% 42% 2013 2012 . Profit margin 2....

Q:

26. Price of Unleaded Gasoline. Data collected by the Oil Price Information Service from more than 90,000 gasoline and convenience stores throughout the U.S. showed that the average price for a liter...

Q:

What is anti-dumping duty?

Q:

The Apex Companys copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the...

Q:

The president of Classic Windows wants to switch to an activity-based approach in the upcoming year. Production line setups are a major activity at Classic. Next year Classic expects to perform 1,500...

Q:

Major Supplies supplies parts for laundry and kitchen appliances. Customer orders are placed over the Internet and are generally filled in one or two days using express mail services. Angela...

Q:

1 1 . At a rate of 1 0 . 0 % , what is the future value of the following cash flow stream? Years: 0 1 2 3 4 CFs: $ 0 $ 7 5 $ 2 2 5 $ 0 $ 3 0 0 a . $ 5 4 4 b . $ 8 2 0 c . $ 6 7 2 d . $ 7 4 6 e . $ 7...

Q:

Question 13 2 pts Age was a question asked on a survey that students filled out for a statistics class. Let m represent the age of a randomly selected male from our class. The probability...

Q:

An insurance company is offering a new policy to its customers. Typically the policy is bought by a parent or grandparent for a child at the childs birth. The details of the policy are as follows:...