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One of your clients learns that her accountant uses a predetermined overhead rate to apply overhead to jobs. She wants to know why the
One of your clients learns that her accountant uses a predetermined overhead rate to apply overhead to jobs. She wants to know why the accountant is using this "complicated" costing system. She thinks that actual overhead costs could be assigned to jobs just as direct materials and direct labor are traced to jobs and this process would be much simpler. Required: Explain the benefits of using predetermined overhead rate and the problems with using actual overhead costs for measuring job costs.
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