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Actual overhead costs for the period are not known until the end of the period, thus inhibiting the ability to estimate job costs during the
Actual overhead costs for the period are not known until the end of the period, thus inhibiting the ability to estimate job costs during the period. Therefore, accountants have to use the predetermined overhead rate, which leads to a trade-off between:
timeliness and seasonality
comparability and understandability
seasonality and verifiability
accuracy and timeliness
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