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

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

Step by Step Solution

★★★★★

3.36 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

If actual manufacturing overhead cost is applied to jobs the company must wait until t... 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

302-B-M-A-J-O-C (1174).docx

120 KBs Word File

Students Have Also Explored These Related Managerial Accounting Questions!

Q:

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

Q:

Why must a company use predetermined overhead rates when using job order costing?

Q:

Why do companies use job specialization? How can specialized jobs be modified to eliminate the boredom and low job satisfaction associated with them?

Q:

EXERCISE 2A-1 Activity-Based Absorption Costing LO2-5 Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Annual per Unit Production Hubs...

Q:

Provide the cost comparison between maintaining the bamboo house and concrete house in financial aspects

Q:

EXERCISE 2A-1 Activity-Based Absorption Costing LO2-5 Fogerty Company makes two products-Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours Annual per Unit Production Hubs...

Q:

Explain why some production costs must be assigned to products through an allocation process If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be...

Q:

26.) Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs? 27.) What factors should be considered in selecting a base to be used...

Q:

2 - 7 Explain why some production costs must be assigned to products through an allocation process. 2 - 8 Why do companies use predetermined overhead rates rather than actual manufacturing overhead...

Q:

Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs? What factors should be considered in selecting an allocation base to be...

Q:

Chateau Furniture and Cabinet Mfg. Co. computes the following balances for its defined benefit pension plan as of the end of its fiscal year. 1. According to FASB Statement No. 87, what is the amount...

Q:

Write the half-reactions as they occur at each electrode and the net cell reaction for this electrochemical cell containing indium and cadmium: In(s)|In (aq)||Cd?*(aq)|Cd(s) anode: 2In(s) 2ln**(aq)...

Q:

a. Dr. Jones, a dentist, wants to increase the size and profitability of his business by building a reputation for quality and timely service. b. To achieve this, he plans on adding a dental...

Q:

In what ways did the leaders behaviors model their visions to others?

Q:

What is the difference between mass and molar mass? How are these two related?

Q:

What is the difference between mass and molar mass? How are these two related?

Q:

What is the difference between mass and molar mass? How are these two related?

Q:

Multiple Choice Question 88 The following information relates to Sandhill, Inc. For the Year Ended December 31, 2017 2018 Plan assets (at fair value) $2424000 $136000 747000 3293000 747000 10000...

Q:

The interest rate on a $64,000 loan is 9.6% compounded semiannually. Quarterly payments will pay off the loan in fifteen years. (Do not round intermediate calculations and round your final answers to...

Q:

Your task is to analyze options on a fund. The time horizon for the analysis is T = 1 ar. The fund has time 0 price S0 = 80 and continuous dividend rate = 0, 02 (pro anno). Use a 4-period binomial...